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Argument over recycling facility continues as costs for city soar

Tuesday, April 7, 2009 by Mark Richardson

The city’s new Single Stream recycling effort – started by staff after a two-year pilot program showed that the program could save the city a lot of money – is close to racking up a $1 million deficit just five months into its existence, according to figures provided by a member of the city’s Solid Waste Advisory Commission. The program, which uses 90-gallon bins which are picked up via an automated truck system, was designed to save the city on manpower costs, vehicle costs and turn a profit by having more recyclable material to sell.


Environmental groups and others claim the lack of a local Materials Recycling Facility (MRF) and a poorly-executed contract to haul material are pushing the program into a deep financial hole.


For their part, city officials say the collapse of the market for recyclable materials is to blame for the high cost of trucking the materials to a MRF, first in suburban Dallas and now to San Antonio, and add that they are not overly concerned about the most of the contract.


Robin Schneider, director of the Texas Campaign for the Environment, is planning a news conference today to discuss what she and others believe is failure by the city to deal with a growing financial problem and a failing program.


“The city already owes $922,000 to Greenstar (the company contracted to haul and handle the materials),” she said. “This can potentially wipe out the savings the city was seeing by sending trucks around every other week. They said they would save $3 million, but the program cost them almost $300,000 just in January.”


The way the two-year contract is written, the city doe not have to pay Greenstar – the costs are covered by the amount of materials that are being sold after they are processed. The problem is that the market for recycled material collapsed late last year and is showing no signs of making a comeback any time soon. Austin recycling is currently being bundled and warehoused.


Schneider and her colleagues provided data gathered from the city by local waste hauler and recycler Texas Disposal Services (TDS).


TDS has just begun a partnership with the City of San Marcos for single-stream recycling. San Marcos is the first Central Texas community to partner with a private hauler to provide single-stream recycling.


Assistant City Manager Robert Goode said the city is still studying whether to build a MRF with public funds or through a public-private partnership.  Meanwhile, the deficit grows.


“There are several partners in the community that are interested in helping us to build that,” Goode said. “We don’t know which the right way to go yet is. We’re trying to evaluate that.” He said the city expects to have its own MRF by October 2010, but added, “there are two six-month extensions, so if we’re not ready, it could be a three-year contract.”


The city hired an engineering firm to design a MRF, but canceled the project after one year and $1 million that yielded no plans.


Schneider says part of the problem is that the city signed a bad contract with Greenstar. She notes that for the same time period that Austin has racked up a $922,000 deficit with Greenstar, the cities of Dallas and San Antonio are both in the black by about $450,000 each.


“When the city was operating its own sort facility, other haulers brought their recyclables to the city,” she said. “Now that the city has shut down its sorter, everybody else is held hostage to these terrible terms. So it is dragging down recycling for everybody, not just City of Austin. It is having an incredible impact on our ability to move forward on our Zero Waste Plan to have more multi-family and commercial streams.”


Goode said it’s not accurate to compare Austin’s contract with other cities.


“We’re comparing apples and oranges,” he said, because Dallas and San Antonio have seven to 10 year contracts. “We have a two-year contract. So, you’re going to pay more because they just don’t have the material coming forward for many years. We didn’t want to do a long-term contract because we’re eventually going to have the materials recovery facility — either we’ll build it or we’ll do a public-private partnership.”


Good points out that the city would not be making money if had built its own facility. “The bottom line at this point is that the recycling market worldwide is upside down. There’s not anybody making money in recycling materials,” he said. If we had our MRF today, we wouldn’t be making money on it.


Schneider said she has taken her case to some members of the City Council, but has not gotten the response she is looking for.


“We’ve shared this with city management and Council and are not seeing any action,” she said. “We’ve had a meeting with Council staff, had a briefing with City Council and mayoral candidates and shared it them.”


Schneider said some members of the Solid Waste Advisory Commission have also met with Council members to express their concerns. The SWAC will continue its ongoing discussion of the recycling contract at Wednesday night’s meeting.

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