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Reports shows 2 recycling firms cost city different amounts

Wednesday, December 12, 2012 by Michael Kanin

Austin’s two major private single-stream recycling partners are costing the city vastly differing amounts, according to a report that will be delivered to the city’s Zero Waste Advisory Commission this evening.

 

Balcones Resources processed more than 2,500 tons of recycled materials in October, which cost the city $44,460 after subtracting the revenue generated from selling the materials ($156,614) from the processing costs ($201,074).

 

In contrast, Texas Disposal Systems (TDS) handled fewer tons (1,993), but cost the city more – $75,940 – after taking into account the revenue generated ($106,385) from the cost to process it ($182,235).

 

Extrapolated over a full year the difference would amount to roughly $360,000.

 

TDS CEO Bob Gregory told In Fact Daily that he was not surprised by the roughly $30,000 difference between the two deals for the month of October. He explained the cost difference by noting the city chose the lowest volume proposal from TDS, and therefore secured the least favorable volumetric pricing option.

 

“They wanted to make sure that they had two (facilities). They wanted to make sure TDS got the smaller percentage. And they wanted to make sure one (of the facilities) was on the north side of the river,” Gregory said.

 

Last year, the Austin-based companies each signed on to the city’s master solid waste agreement after a contentious and drawn out effort to re-configure Austin’s residential single-stream recycling program. TDS had pushed hard to receive all of the city’s residential single-stream recycling, but Austin-based Balcones received more of the city’s business. Under the deal, Balcones collects about 60 percent of the city’s recycling – everything north of the Colorado River – while TDS gets the remainder. (See In Fact Daily, April 29, 2011.)

 

The agreements differ in specifics, based on the performance of the recycling commodities markets. October’s numbers are the first available since the split began and reflect the realities of a middling recycling market.

 

Austin Resource Recovery Director Bob Gedert told In Fact Daily that he expects recycling commodities prices to increase in favor of the city by next spring. If so, that would mean instead of paying money to the recycling companies the city would generate revenue.

 

Either way, Gedert said he believes that the Balcones deal will offer “a more favorable return” than TDS’.

 

The Zero Waste Advisory Commission is scheduled to discuss the results of the single-stream recycling report when it meets at 6:30pm tonight at City Hall.

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