Sludge deal renews issue of conflict on council

Erin Neff

Thursday, Nov. 4, 1999 | 11:27 a.m.

Questions about conflicts of interest and stifling competition still swirl around the Las Vegas City Council's decision in July to grant Silver State Disposal an exclusive trash-hauling contract until 2021.

Even with such criticism fresh in its collective mind, the council almost approved another exclusive contract with Silver State on Wednesday before a disclosure issue forced the board to hold the consent agenda item for two weeks.

The council was asked by the Department of Public Works to approve a five-year disposal contract with Republic Environmental Technologies of Nevada for sludge removal from the city's Water Pollution Control Facility.

The contract would be worth $1.5 million in the first year, with 6.5 percent increases annually over the life of the deal. The contract also has three five-year options to extend the deal -- bringing the life of the agreement to 20 years.

Robert Groesbeck, corporate counsel for Silver State, said his company would honor the terms of the existing six-year-old sludge disposal contract -- which expired Wednesday -- for 30 days so that certain disclosure requirements can be made.

A city ordinance, adopted Oct. 1, requires disclosure of all persons and entities holding more than a 1 percent interest in any company with whom the city enters into a franchise agreement or sale of land.

Silver State's disclosure, which accompanied the service contract request, simply stated that Republic Services Inc. owns 100 percent of all interest related to Republic Environmental Technologies Inc.

"Keep in mind we are a publicly traded business with filings made to the (Securities and Exchange Commission)," Groesbeck said.

The company, which he said has more than 170 million shares, is willing to disclose all partners, but had not yet compiled the data.

Mayor Oscar Goodman and Councilman Larry Brown both abstained on the vote to hold the item. Goodman cited his ownership of land adjacent to the Apex landfill Silver State uses and his law partner's past representation of the firm.

Brown said he is still awaiting a state Ethics Commission ruling on whether he can vote on business involving companies who sponsor events at Cashman Field. Brown works part-time for the Las Vegas Stars, who play at Cashman.

Brown requested an opinion from that commission in July and said Wednesday he has yet to hear from it.

Both Goodman and Brown abstained from the July vote granting Silver State the 15-year extension to haul residential and commercial trash. However, Councilman Michael McDonald -- who is friends with both Groesbeck and Silver State President Steve Kalish -- did not abstain on either July's or Wednesday's vote.

McDonald received more than $36,000 in campaign contributions from Silver State and its related entities during this May's re-election campaign. Kalish also threw a fund-raiser for McDonald at Paddy's Pub & Eatery, the tavern Kalish owns on Pecos Road.

McDonald has repeatedly said he perceives no conflict of interest in his decision to vote on contracts involving Silver State despite his friendship with Kalish and Groesbeck. McDonald also dates a woman who works for Silver State.

McDonald also publicly stood by Groesbeck when he was arrested Labor Day weekend at the House of Blues Foundation Room on lewdness and related charges. Groesbeck entered a plea agreement reducing those charges to misdemeanor disorderly conduct and resisting arrest.

"I have no conflicts," McDonald said Wednesday after the meeting. "I did not request this item be put on the agenda and I am basically just here with the rest of the council to consider it."