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Rhodes says city still saving money on recycling

Wednesday, April 8, 2009 by Austin Monitor

Critics of the city’s recycling program continued to hammer at Solid Waste Services on Tuesday, calling on the city to renegotiate its contract with Greenstar, the private company hauling the cans, newspapers and plastic that Austinites recycle to San Antonio. Since October, when the contract went into effect, the city has lost close to $900,000.

 

Assistant City Manager Robert Goode said if would be impossible to renegotiate the contract in today’s economic climate. He pointed out that the price of plastic was once $250 a ton. “It’s now worth zero. We’re not going to get any better price,” he said.

 

SWS Director William Rhodes also defended the recycling contract in a memo to City Manager Marc Ott, noting that the city has avoided landfill costs as well as costs for equipment, fuel and additional personnel. At one point in the memo, Rhodes stated that the city saved $1.5 million, but later he stated that amount saved was $1.3 million. City staff has promised to explain that discrepancy and detail how much had been saved in each category.

 

While environmentalists from Ecology Action, Texas Campaign for the Environment and Central Texas Zero Waste Alliance were claiming the city owes Greenstar $922,000, the city staff said the actual figure is more like $870,000. Heidi Gerbracht, an assistant to Goode, said Rhodes had explained that the higher number was released to Texas Disposal Systems under a public information request. However, upon auditing the numbers, Gerbracht said, the city found errors in Greenstar’s calculations reducing the amount owed to $870,000.

 

Texas Disposal Systems does both recycling and landfill operations in the Central Texas area and has criticized a number of the city’s solid waste decisions, including the contract with Greenstar. Ryan Hobbs of Texas Disposal Systems obtained information from Austin as well as Dallas and San Antonio on recycling contracts, and said he would not be surprised to hear that there were mistakes in Greenstar’s figures, adding that he had found $5,000 in errors in fuel costs alone. Hobbs said whether the amount owed is $922,000 or $870,000, “It’s going the wrong way, so something needs to be done.”

 

According to data collected by Hobbs, Dallas made nearly $73,000 in January and more than $64,000 in February. San Antonio made about $22,000 in January and more than $38,000 in February. This occurred while the City of Austin was accruing hundreds of thousands of dollars in debt—to be paid back either in recyclables when the market recovers—or in cash.

 

Rhodes and Goode have explained previously that San Antonio and Dallas are making money now because they have long-term contracts with Greenstar, unlike Austin, which has only a two-year contract with two six-month extensions possible. (See In Fact Daily, April 7, 2009.)

 

In addition, Rhodes said, “It is still the city’s belief that this revenue contract will make money by the end of the term of the contract (October 2010), though much depends on the market conditions and the increasing amount of material collected curbside.”

 

Rhodes also said in his memo that the city might be in a worse position if it had its own materials recovery facility (MRF). “It is possible, if the market does not get flooded with all the recyclables currently being stored, and additionally if the recyclables are able to be stored without contamination, that the City of Austin could recycle its way out of our current debt with Greenstar,” he wrote.

 

Robin Schneider of Texas Campaign for the Environment, who serves on the Solid Waste Advisory Commission (SWAC), said, “I think we have a city staff who doesn’t want to admit when they’re wrong.”

 

“I’ve never run a sorting facility” Schneider said, “but if the city had its own facility locally, we would not be paying hundreds of thousands of dollars to transport our recyclables. We would not be charging ourselves $70-100 for processing and we would be getting the full value of our recyclables the way San Antonio is…I find it absolutely mind-boggling that they could say we would be losing money.”

 

Asked whether she was trying to get Rhodes ousted from his job, Schneider said, “We’ve had a lot of issues,” with SWS over the years, pointing out that the disagreements did not start with Rhodes. However, she added, “They’re undergoing a review right now, but we can’t afford the lousy leadership that we’ve had. The city’s in a budget crisis. And we need city departments that are run by competent managers.”

 

Some Council Members do think it would be worth looking at other recycling possibilities. Laura Morrison said, “Clearly they should be looking at all the alternatives that we have. I am not familiar enough with the details of the contract but certainly we should be exploring those from a good management perspective because it is apparently not turning out the way the city had assumed it would.”

 

The city expects to have a recommendation from its consultant on how to proceed with a MRF in June.

 

Morrison said, “Clearly, we need to have a decision and know where we’re headed, to make sure we’re on some kind of financially sustainable path.”

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