The Babylon Town Board voted unanimously Monday afternoon to rescind a 10-year residential garbage collection contract with Jody Enterprises of Babylon.
The board awarded the contract to Jody in June, but that contract was called into question following the of two Jody managers in an alleged recycling scheme.
"I don't think that as the town supervisor I should be locking the Town into a long-term relationship with people who clearly at this point I think have proven that they don't have the wherewithal to go forward and I seriously question their integrity as to how they presented themselves to the Town from the outset," Town Supervisor Rich Schaffer said following the board meeting at Town Hall.
The 11-page resolution rescinding the contract, which would have been worth about $6.7 million in its first year with annual increases to follow, cities several examples in which the Town believes it was misled by Jody, including the business interests of its top managers.
With regard to the arrests of William A. Stegemann, 55, and Michael Dalessandro, 43–both billed as managers for the newly formed Jody Enterprises of Babylon–on grand larceny charges that officials say may have cost the Town of Smithtown more than $200,000 in recycling revenue, the resolution says the arrests have "significantly impaired and will continue to impair the ability of Jody Enterprises of Babylon, Inc. to implement and fulfill the terms of the service contract, especially at this critical juncture with the impending Oct. 1, 2012 contract start date a mere three weeks away."
An attorney for Jody, Vincent Messina, told the board last week that the company and its owner, Giustino Gallone, were "as much a victim of their misdeeds as anyone else," referring to the actions of Stegemann and Dalessandro, who have both pleaded not guilty.
Messina said Jody had taken steps–including installing upgraded GPS systems in its trucks–to avoid any repeat of the alleged fraud, but the Town Board, which also viewed surveillance videos last week of Dalessandro moving trucks and engaging with workers at a Jody property in Bay Shore a week after he was said to have been terminated, were not swayed.
"It was almost as if they were wanting us to make the decision we made today," Schaffer said, adding that a statement from Jody claiming Dalessandro was at the site to advise a new employee, was "pretty insulting."
"Literally a lot of what they said and did helped us make the decision," the town supervisor said of rescinding the contract.
Messina had no comment after Monday's decision, but he did say Jody may consider legal action against the Town.
Jody Enterprises currently collects trash from more than 30,000 homes in four townships, but the Town of Smithtown took last week toward terminating its contract with Jody after the alleged fraud was uncovered.
The Babylon Town Board will now decide whether to award a short-term contract to its current contractor, Babylon Source Separation Inc. [BSSI], or to the second lowest bidder, Encon.
BSSI has offered to work under an short term emergency contract for $21.70 per household per month [a 20 percent discount from the $27.14 it was charging under the contract that is to expire on Oct. 1] through the end of the year or extend its current contract at a rate of $17.50, which is what it had bid for the long-term contract that Jody had been awarded.
Jody's low bid was $12.99 per household. Encon bid $13.40. Schaffer said he would be in touch with Encon Monday to see if it is ready and willing to operate by Oct. 1.
The board is scheduled to meet again at noon on Tuesday.