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After spending $1 million, city drops plans for recycling facility

Friday, October 10, 2008 by Mark Richardson

The city’s Solid Waste Services Department – at a time when it has just published a Zero Waste plan and instituted a new Single Stream Recycling program – has stopped work on developing a new Materials Recycling Facility. SWS has also signed a contract with an outside firm to handle its recyclables, but at terms that may actually cost the city money instead of bringing profits from the sale of the materials.


The move has puzzled both interested observers and members of the Solid Waste Advisory Commission, which advises the City Council on programs and operations at the Solid Waste Services Department.  The city closed down its current Materials Recycling Facility, also known as a MRF (pronounced Murph), last Thursday and began sending the recyclable materials it collects from customers’ curbsides to a company called Vista Fibers. Vista is under contract to ship the materials to one of its facilities, process the recycled materials, sell them to manufacturers who reuse them, and return the profits of that sale to the city.


SWS officials said plans for a larger city-owned MRF were pulled off the table in August when funding for the plan was terminated during the city’s budget process. The new MRF had been in the works for more than a year, and the city has paid consultant R.W. Beck about $1 million for MRF plans that will likely be shelved.


Members of the commission and a private waste hauler, Texas Disposal Systems, asked numerous questions of SWS Director Willie Rhodes Wednesday at a commission meeting, but did not get many answers.


“What I want to know is, what did the city get from R.W. Beck for its $1 million?” asked SWAC Co-chair Rick Cofer. “Will the work they submitted at the end of the project be of any use in the developing a MRF in the future?”


Rhodes said that R.W. Beck produced approximately 20 percent of the work called for in the original $3.5 million contract to design a single-stream MRF for a planned Green District in the Austin area.  Asked what the consultants accomplished, Rhodes was vague, saying that R.W. Beck developed a number of scenarios on “how the MRF was going to be aligned in the Green District.”


Cofer also pointed out to Rhodes that he had repeatedly asked – for at least six months – for a report on progress on the MRF, either from city staff or from a representative of R.W. Beck. Cofer added that each time the commission was due to get a report it received excuses instead. For example, he said SWS staff has said they had accidentally left the report at the office, or that the person who was scheduled to make the report was out sick.


The new MRF that R.W. Beck had begun planning in early 2007 was supposed to have been ready to begin taking in materials last Monday, Oct. 6, the same day that the city began its Single Stream Recycling program.


However, SWS officials apparently realized as early as March or April of this year that the MRF was either not going to be ready or would not be built. On May 14, Rhodes brought a contract with Vista Fibers, which is owned by a company called Mid-America Recycling of San Antonio, to the Solid Waste Commission. That contract was for two years with estimated revenue of $3 million to the city, with two six-month extensions that would bring another $1.5 million in revenue.


A clause in that contract allows Texas Disposal Systems, which had been processing the recycling it picked up from outlying areas of the city through the city’s old MRF, to process its materials through Vista Fibers under the same terms as the city, plus a 7 percent processing fee.


However, according to TDS President Bob Gregory, after several months of asking, he was finally provided with the contract’s financial information on Oct. 2.  After analyzing that data, Gregory said the numbers did not look very good.


“We have been, under the old contract we have with the city, making net revenues over the past two years of about $1.4 million on about 8,000 tons of recyclable materials,” Gregory said. “However, when I plug the same amount of recyclables into the new city contract with Vista Fibers, I end up losing more than $300,000. We have begun, at great expense, sorting our own recycling on the premises to avoid having to force my clients to charge each of their recycling household customers an extra $1.50 a month to break even.”


Gregory asked that if he is operating under the basic terms of the same contract, how does the city plan to make its projected $1.5 million in annual revenue?


“If they (the city) are doing business under the same terms that I am, and I’m losing money, I don’t see how they aren’t going to lose money too,” he said. “I know that the City Council approved this contract back in June, but I wonder if they knew what the actual terms were when they OK’d it.”


SWS staff told In Fact Daily on Wednesday that there is still a MRF in the city’s plans.


“Solid Waste will develop a master plan that will include a new materials recycling facility,” said Jill Mayfield, SWS Public Information and Marketing Manager. “The future plant could be wholly owned by the city or it could be a  public/private partnership.  Also, this plan (from R.W. Beck) will help us determine if we need to make any future materials recovery facility regional in scope. The master plan will help us determine the best avenue to take.”

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