WILMINGTON, MA — As Wilmington Apple previously reported, Russell Disposal — Wilmington’s trash and recycling contractor — is struggling financially due to a significant rise in tipping fees for recyclables after China decided earlier this year to stop taking America’s recyclables. Recycling contractors around the country are finding themselves in the same difficult situation.
It was revealed at last week’s Board of Selectmen meeting that Russell Disposal has now failed to provide the Town with its annual performance bond, resulting in a breach of contract.
As part of the 10-year contract between the town and Russell Disposal, the company is “required to provide the Town with a performance bond in the amount of the total annual contracted price for trash and recycling collection.” In Fiscal Year 2019, which began July 1, that amount is $1.192 million.
“In the event that Russell Disposal fails to collect the Town’s trash or recyclables for financial or other reasons and fails to ‘cure’ the problem after being placed on notice, the Town could seek funds from the performance bond to hire another contractors to fulfill the responsibilities,” explained Town Manager Jeff Hull in a memo to Selectmen, which he summarized at the meeting. “The purpose of the bond is to provide the financial resources to fulfill Russell Disposal’s responsibilities.”
“The challenge for the town in terminating the contract is that if we go to another vendor, the cost is going to be significantly higher because the new contractor will have to subscribe to the current prevailing wage rate,” cautioned Hull. “We’d also have to bear 100% of the cost of wherever the new vendor would bring the recyclables, whereas now we’re bearing up to 50%”.
“The performance bond is essentially an insurance policy for the Town,” continued Hull. “Russell Disposal continues to perform the weekly collection of trash and bi-weekly collection of recyclables throughout Wilmington. There is no indication that they will not be able to continue fulfilling their performance obligations. However, maintaining some form of security to address non-performance is advisable.”
“I hope we can work with Russell and reach a solution,” said Hull, who gave Russell Disposal until August 15 to “provide alternative means to provide security to the Town in the event of non-performance.”
The company, in a prior correspondence with the town, said it was in the process of working with a new broker to hopefully provide the bond.
Selectmen will continue to receive updates on the matter at future meetings.
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