Will Holly Pass Muster at Council?

Council to consider controversial bid proposal

A proposed multimillion-dollar contract distinguished by its lingering controversy is back on the City Council agenda today (Thursday, April 28), with city staff making another effort to obtain the council's blessing to negotiate a demolition deal on the Holly Street Power Plant. (Late Wednesday we learned the item was postponed till May 12.)

The staff's selection, TRC Environmental Corp., says it can do the job for $11.5 million – a price reduction of more than half its bid last year of $24.9 million, which still landed the company in the No. 1 slot for the contract. A public stink ensued over the high price, so the city rebid the project and settled again on TRC, stirring another dustup that played out at the April 18 meeting of the Electric Utility Commission, which kicked it to council without a recommendation. "If I had people submit bids to do work on my own home, and after they rebid it they cut [the price] in half, I'm not sure I'd want to do business with them," EUC Chair Phillip Schmandt said at the meeting.

Barring a postponement, staffers overseeing the bid process will likely be asked to explain their selection when the council convenes its regular meeting today – this time at South Austin's Crockett High School, located at Stassney and Manchaca. The first bid process sparked formal complaints from No. 2 bidder Dixie Demo­li­tion and last-place competitor NCM Demo­li­tion and Remed­ia­tion. NCM followed up with a lawsuit, which was dismissed. In the ongoing proceedings, Dixie, which again placed second in the scoring, is laying low, and company officials have not responded to Chronicle requests for comment. NCM representatives have publicly questioned the city's selection of TRC but said they'll wait for council action to determine their next move.

Anticipating queries from council at today's meeting, Assistant City Manager Rudy Garza asked TRC to submit a letter to explain its substantial price drop. In an April 22 memo to the city's Contract and Land Management Department, which Garza oversees, TRC laid out several points that led to its ability to whittle its bid by more than 50%. TRC said the city's revisions to its second request for proposals served as an impetus to lower its bid price. To start with, the city eliminated its required $5 million credit for recycling of salvage and scrap materials, reducing the original $24.9 million cost to $19.9 million.

"In our original proposal," the memo states, "we assumed that non-asbestos materials would need to be removed as if they contained asbestos." Freed from those presumed restrictions, TRC said it was able to lop an additional $3 million off its price. Additionally, market forces in the salvage and scrap metal industry improved between the first and second bid proposals, leading to another cut of almost $3 million. Other factors helped TRC pare down the bid, company officials said, including the hiring of additional local subcontractors and workers from the East Austin neighborhoods surrounding the power plant. "TRC and its subcontractors are confident that we can perform this project safely," the company vowed in its letter. (Both NCM and Dixie had previously pointed out that TRC should be held to greater safety standards because of a high-profile job accident involving a worker fatality. The case is currently in settlement negotiations.)

With the high cost of TRC's bid emerging as a chief concern in the first round of proposals, staff members revised the scoring matrix to add more weight to the bid price in the second round, giving TRC the advantage with its low-bid offer.

"We took the city's message to heart and took the rebid as an opportunity to restructure the proposal," said TRC project manager Mike Holder. "We've done this twice now, and from two different perspectives." Holder took issue with criticisms that the city is giving preferred treatment to TRC – first with the opportunity to rebid, followed by another opportunity to explain in writing its significant price drop. TRC provided the city with the best proposal in both rounds of the bidding process, Holder said.

Even though TRC is California-based, the company maintains an office in Austin, where it has developed political and community ties to the city and the Holly Street neighborhood. That connection also appears to weigh in its favor, and Holder points to his company's extensive outreach efforts with residents who live near the power plant. Additionally, Paul Saldaña, a consultant on the TRC team, grew up in the neighborhood, as did members of the prominent Limon family, part of which owns a trucking company that will provide hauling on the project if TRC gets the contract. Saldaña also noted TRC has done significant work toward building relationships with local African-American contractors – chief among them longtime contractor and advocate Carol Hadnot.

While it's uncertain how the TRC matter will play out at the council meeting, what is certain is the council's unspoken desire to have this issue settled and moved out of the spotlight before voters go to the polls May 14 to decide three open council seats. Mayor Pro Tem Mike Martinez – who has the luxury of not running for re-election this year – wasted no time Tuesday sounding off on his Facebook page, in response to a fretful Austin American-Statesman editorial. "I have lots of questions that I will be asking this morning during the council work session," he wrote. "I am not too happy with the way things unfolded. Time to find out why and how ... and fix it."

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Holly Street Power Plant, City Council, TRC Environmental Corp.

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