Chair Sanchez questions Anderson on carter buyout and contract transfer process
Sanchez asks about the process by which a third Staten Island awardee was bought out and whether it sets a precedent that buying a carter automatically yields a city contract. Anderson explains the due diligence process, noting pricing and contractual requirements remain unchanged after acquisitions.
One of the, thank you member, minority leader Carr for your questions.
One of the concerns that I have, separated and aside from the Staten Island issue is, I know that Staten Island had a Carter that was changed to, was bought out by another Carter.
And can you explain the process of how they automatically were,
Yes, they did buy out that third carter that had been the awardee.
But for the future, one of the concerns that I have is, does that set a precedent that if you buy out any of the other carters, you automatically have a contract with the city?
Could you just explain a little bit more on how that process came to be and for the future, what that process will look like for other times?
I know we were in a bit of a...
Situation as we were trying to get the CW
UZ online for today, but just understanding what that process can look like for the future and if there are any adjustments or amendments that can be made so that it doesn't look like all you have to do is buy somebody out and then you get a city contract.
Yeah, so we've actually seen a large amount of merger and acquisition activity in the commercial waste industry since
since Local Law 199 passed in 2019, and then also since the awards were done in 2024.
For example, the first zone that was implemented, the Queen Central Zone, one of the awardees was purchased by another company,
Royal was purchased by Waste Connections.
That award was then transferred to the other awardee.
There's a due diligence and review process that Frank and his staff conduct to ensure that the purchasing company has the financial wherewithal to provide the service that we require,
that they're able to meet all of the standards and contractual requirements.
And most importantly, the pricing does not change.
So if one company merges with another or acquires another, the pricing that was in that initial RFP stands as the pricing that they're required to honor.
And so, you know, it's not simply you're buying the award, but you are, you know, purchasing the company and agreeing to...
meet all of the same requirements that that predecessor company had committed to.
And that's common across New York City contracts.
We have situations where, and this has happened, for example, with our recycling vendor.
It's gone through, in the time that I've worked at sanitation for the last 12 years or so, has gone through three different names, three different corporate ownership structures.
That kind of thing happens in the corporate world, and that kind of thing happens in the entities that we as the city do business with quite regularly.