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Hired Truck figure benefits from city’s no-bid waste-station contract extensions

Lakeshore Recycling Systems, LLC, runs this city-owned waste-transfer site on the South Side. | Kevin Tanaka / Sun Times

It was seen as a sweet deal for a foul-smelling task: The city of Chicago hired three clout-heavy companies in 2010, the waning days of Mayor Richard M. Daley’s administration, to operate city-owned waste-transfer facilities, a way station for recyclables and trash.

The competitively bid deal — which, according to city officials, was awarded to companies with the best, though not necessarily the least-expensive, proposals — was supposed to be for three years and cost taxpayers no more than $79.4 million.

Eight years later, after Daley successor Mayor Rahm Emanuel has repeatedly extended the contracts without seeking competitive bids from other companies, the cost to taxpayers has ballooned by $65 million.

The total price tag so far: about $144.4 million.

It’s another example of Emanuel’s City Hall allowing businesses to hold onto taxpayer-funded work far beyond the original contract length, sometimes without having to match competitors’ prices or qualifications. In one case, the Chicago Sun-Times has reported, Rossi Contractors, Inc., of Northlake, and Westmont-based K-Five Construction Corp. have reaped millions of extra dollars for concrete and asphalt work at O’Hare and Midway airports as City Hall repeatedly gave them no-bid extensions and more work.

Waste-transfer facilities are where city trucks temporarily dump garbage and recyclables picked up from homes and small apartment buildings to be moved onto other trucks destined for landfills or recycling sites.

City officials say they extended the contracts to ensure “continuity” while revamping residential garbage routes that used to be ward-specific but now are operated on a grid system that spans wards, saving millions a year, in part by reducing the number of garbage trucks needed.

“All vendors received the same extension opportunity,” according to Emanuel’s Department of Streets and Sanitation.

City Hall plans to seek new bids for each of the contracts later this year.

Among the businesses running a city-owned waste-transfer facility is MAT Leasing, Inc., run by Michael A. Tadin, a longtime Daley friend and Bridgeport trucking magnate who made a fortune in the city’s Hired Truck Program.

The year before Emanuel succeeded Daley, Tadin’s company won the three-year waste contract, with an option for three more years, to operate the facility on the West Side at a three-year cost of nearly $39.5 million, records show. MAT was the lowest of six companies seeking the work — by around $2 million.

After five no-bid extensions, Tadin’s company still runs the plant for the city, though now it handles only garbage. It has been paid more than $77 million.

Michael A. Tadin’s MAT Leasing, Inc., operates this city-owned waste-transfer facility on the West Side. | Kevin Tanaka / Sun Times
Michael A. Tadin’s MAT Leasing, Inc., operates this city-owned waste-transfer facility on the West Side. | Kevin Tanaka / Sun Times

MAT and another Tadin company, Marina Cartage, were big players in the Hired Truck Program, in which the city paid for privately owned trucks for infrastructure projects. In 2004, the Sun-Times exposed widespread fraud, waste and mob ties in the program, which Daley shut down amid a scandal that saw four dozen people convicted of federal charges.

Neither Tadin nor his companies were accused of any wrongdoing.

Tadin was a long-ago business partner of Fred Barbara, another Bridgeport multimillionaire and Daley friend, who was a consultant to Allied Waste Transportation, Inc., around the time it won a contract to run another city-owned waste-transfer site, this one on the North Side.

Allied’s bid was about $120,000 higher than the lowest bid, records show. Its three-year contract totaled $24.3 million. The company — run by Phoenix-based Republic Services, Inc. — has been given five no-bid extensions, with payments totaling $29.4 million to date, records show.

Allied Waste Transportation, Inc., runs this city-owned waste-transfer site on the North Side. | Kevin Tanaka / Sun Times
Allied Waste Transportation, Inc., runs this city-owned waste-transfer site on the North Side. | Kevin Tanaka / Sun Times

Heartland Recycling LLC — at the time run by another former business partner of Barbara — won a third three-year city deal, for $15.6 million, to run a South Side waste-transfer site. It was the lowest bidder of four companies vying for the work.

That contract is still in effect — with Morton Grove-based Lakeshore Recycling Systems, LLC, now owning Heartland — and has cost taxpayers $38 million thanks in part to five no-bid extensions, records show.

The companies are paid based largely on how much waste they handle. Tadin’s company has been processing the most: more than 188,000 tons in 2017, compared to about 114,000 tons for Allied and nearly 82,000 for Heartland, according to City Hall.

MAT has made more than $11,000 in campaign contributions since 2011 to Ald. Patrick O’Connor, Emanuel’s city council floor leader, records show. It gave $1,500 to the campaign fund of Ald. Patrick Daley Thompson — Daley’s nephew — in 2015 and $10,000 to one of Ald. Ed Burke’s campaign funds in March, records show.

Tadin says his contributions had nothing to do with keeping his city business. When the city seeks new bids, he plans to submit a proposal.

Lakeshore will, too, according to CEO Alan Handley. He says taxpayers have been getting a good deal, saying “the costs in the market are escalating,” and the rates the city has been paying haven’t kept pace.