ZURIK: Invoices show disparity in New Orleans’ waste collection contracts

NEW ORLEANS (WVUE) - New documents show a huge disparity in pay between the trash collectors that operate in the City of New Orleans.

The city splits its trash collection in half. IV Waste and Waste Pro handle half of the city, while Richard’s Disposal picks up trash in the other half of the city.

The areas that IV Waste and Waste Pro collect in used to be held by Metro Services Group. However, the city rebid that contract and hired the two new contractors at a much higher rate.

Richard’s is operating under the old contract, which Metro Services Group also operated under. Richard’s gets paid $13.75 per house for trash and recycling, while IV Waste makes $21.28 per home, and Waste Pro makes $22.88 per home.

Invoices obtained by FOX 8 show for each month, Richard’s makes about $960,000, while IV Waste and Waste Pro collect a combined $1.6 million. That’s a difference of about $8.4 million per year.

Dillard University political analyst Dr. Robert Collins says the differences in the contract appear to harm one company and taxpayers.

“It doesn’t really make any sense for one half of the city geographically… for the contractor in charge of that area to be compensated at a different rate than roughly the same amount of land in the other half of the city. It doesn’t seem to make any sense,” Collins said. “It doesn’t allow the taxpayers to receive fair and equitable services for their money. It appears that the taxpayers are overpaying for one set of services to one contractor, and they’re actually underpaying for another set of services to another contractor, which is going to cause the second contractor to basically go out of business.”

The city pays IV Waste and Waste Pro for every house the companies pick up trash up from. However, records show the city refuses to pay Richard’s Disposal for every home. That lack of payment costs the company about $800,000 per year.

Jimmie Woods, the owner of Metro Disposal, tells FOX 8 his company also wasn’t paid for all the homes it picked up from. He says the lack of payment makes it nearly impossible for Richard’s to compete.

“Richards is doing the same work that IV Waste and Waste Pro is doing right now, and he’s getting paid substantially less. Not only per unit but also he’s not being paid for all of the homes that he’s collecting. So he’s at a tremendous disadvantage.” Woods said.

Councilmember Joe Giarrusso was the first to go on camera with FOX 8 about the disparities between the contracts.

“It’s not fair. It’s an unlevel playing field. How can you expect how Mr. Richard at $13.75 to compete with other contractors who are getting between $23 to $28 a can, you just can’t. Because those other companies can pay people more money. So, we have to make sure that there’s parity between those two issues,” Giarrusso said.

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Now, the Chair of the Public Works Committee, Councilmember Oliver Thomas, has responded to the disparity.

“How do we replace two major minority contractors, who are involved in philanthropy, who are involved in hiring people from the community, who are involved in business?” asked Thomas. “And I know all the other stuff is good politically and stuff, but for me … when you lose a Jimmy Woods and a Metro, when you lose or you potentially damage a Richard’s... after they found a niche to improve economic and social standing; how do we replace that?”

Mayor LaToya Cantrell has said she plans to pay Richard’s a so-called “get-well package,” which insiders tell FOX 8 could be a few million dollars. However, the get-well package will likely be a one-time payment. It would not reduce the disparity of payments that has Richard’s earning $8 million less a year than IV Waste and Waste Pro.

The disparity in pay has negatively impacted two of the city’s most prominent black-owned businesses. Woods says the Cantrell administration tried to destroy his company and Richard’s, but Thomas says the blame for the contracts crosses administrations.

“That was wrong now, it was wrong with the last administration, it would be wrong if that happens in the future. You don’t create advantages by treating companies like Richard’s and treating companies like Metro like they don’t add to the social good,” Woods said.

However, right now, Richard’s is at a disadvantage, and if the City of New Orleans doesn’t alter the company’s contract, it will be paid millions less a year than its competitors for doing the same work.

The city also refused to pay Metro Services Group and Richard’s Disposal disaster pay during the COVID-19 pandemic and following Hurricane Ida.

Woods believes the city’s refusal to pay may be political. Both Woods and the owner of Richard’s Disposal, Alvin Richard, supported Mayor Cantrell’s opponent in her first run for mayor.

“I think politically, I would have expected that we would have tried to not only make sure they had the ability to compete fairly, but also the ability to maintain those contracts, as long as they were doing a good job,” Thomas said.

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