McDonald backtracks on Silver State contract

Erin Neff

Thursday, March 2, 2000 | 11:14 a.m.

Las Vegas City Councilman Michael McDonald's about-face Wednesday on a sludge contract vote could force him into even more explanations about his past actions.

By abstaining Wednesday, McDonald said he wanted to clear the way for the state Ethics Commission to rule on a related matter later this month.

But by not participating on the Republic Silver State Disposal Services contract this time, it may lead some to wonder why he did vote on that company's business in July.

"With today's vote, not knowing what standard I'm going to be held to, the attorneys said it's better to err on the side of caution," McDonald said after the meeting.

The council awarded Silver State a $1.5 million-a-year contract to haul the city's sludge, despite public comment that the city was stifling competition by not opening the service to bid.

The contract, which is for a term of five years with one five-year renewal, was approved 5-0. Mayor Oscar Goodman, who owns property near Silver State's Apex landfill, joined McDonald in abstaining.

In July when the council awarded Silver State a $1.5 billion contract extension for residential trash hauling -- years before the contract expired -- McDonald chose to vote on the matter without disclosing any of his relationships to the company.

McDonald is friends with Silver State President Steve Kalish and with the company's attorney, Robert Groesbeck. Kalish threw a fund-raiser for McDonald at his bar last spring, raising an undisclosed amount of money. Silver State and its related entities also donated $36,800 to McDonald's re-election campaign.

McDonald also dates Jennifer Simich who works for Silver State.

Former City Councilman Steve Miller asked the state Ethics Commission whether McDonald should have disclosed his relationships and abstained from that vote.

A two-member panel of the commission determined in January that the full commission should hold a public hearing to discuss whether McDonald acted improperly.

Before Wednesday's vote McDonald read the state's ethics law as it pertains to conflicts of interest and declared none of its provisions applied to him.

"But rather than put (the Ethics Commission) in an awkward position, I will abstain," McDonald said.

The commission is scheduled to hold its hearing about McDonald on March 23.

"I think it's stupid that I couldn't vote today," McDonald said. "But at least I'll get a full hearing on it later this month."

Potential conflicts of interest were the least concerns of those protesting the council's decision Wednesday.

Las Vegas resident Al Gallego told the council to put the contract out for bids so that biosolids recycling companies could have a shot at the sludge Silver State will dump into its landfill.

"Let's use this sludge," Gallego said. "Let's make some money. Right now you're not going to help anyone by dumping it in a landfill."

Kelly Sarber, a vice president for publicly traded biosolids recycling company Synagro, told the council it had nothing to lose by putting the service out to bid.

"It would be an advantage to put this product back to the land where it's generated," Sarber said.

Sarber's firm, with operations in Southern California, currently sells its recycled product in Las Vegas. The mulch is used locally at the Las Vegas Speedway, the Spanish Trails Country Club and other places.

Councilman Larry Brown said those critics failed to understand that the city's contract allows it to sell or give some of its sludge away.

"We have, for the first time, the ability to do this," Brown said. "We have a great deal here."

The city will pay Silver State $15 for every ton of sludge it hauls from the city's Water Pollution Control Facility. That rate is the same amount paid by Clark County and the city of Henderson for the same service.

Las Vegas generates about 200 wet tons of sludge each day. As long as the city allows Silver State to haul 164 tons daily, it can sell the remaining amount to another firm.

The most vocal critics of the contract Wednesday were representatives of Western Elite, a recycling firm in Lincoln County.

Western Elite President Ryan Williams said that he thought the city should demand Silver State pay franchise fees on the sludge hauling.

The city's definition of sludge as rubbish allows the removal of such product to fall under Silver State's regular trash-hauling franchise. Since Silver State has the franchise, the city argued it did not have to put the service out for bids.

"Why then aren't they paying their franchise fees?" Ryan Williams asked.

Frank Cremen, an attorney representing Silver State, said those fees would be $75,000 a year.

City Manager Virginia Valentine said it is her understanding that Silver State has agreed to begin paying a franchise fee. However, she said the city will have to enter talks with the company to establish that.

Valentine also said the city needs to change its code to more clearly define sludge. That code change will be done in cooperation with Silver State, she said.