The Greensboro City Council is going to get some unwelcomed news at its work session on Tuesday, Feb. 5.
The Council is going to get the details on the recycling program that through no fault of anyone involved is going to cost the city a lot more money starting next year.
The city is currently operating under a recycling contract signed in 2013 that turned out to be a windfall for the city and a disaster for ReCommunity that won the recycling contract.
When the contract was signed the city could either have taken a variable rate of payment based on the price of the recycled material, or a flat rate that would not go up or down regardless of the price being received for recycled material. The city chose the lower but safer flat fee of $30 per ton. At the time the price being paid for a ton of recyclable material was going up and a consultant hired by the city predicted that it would continue to rise, so there was quite a debate on the best contract for the city.
Since that contract was signed the recyclables market has fallen through the floor. One of the major factors in the falling price of recyclable material is that China greatly reduced the amount it was buying and demanded much higher quality for what it did buy.
In 2016 ReCommunity came back to the city and said the amount of money it was losing in Greensboro was endangering the financial status of the company. The city relented and cut the payment in half to $15 a ton but insisted that the contract which was scheduled to end in 2018 be extended to 2020.
However, in 2020 that contract much to the relief of Re-Community which is now owned by Republic Waste comes to an end.
Because the price of recyclables on the international market has fallen so low, the city will have to start paying to have materials particularly mixed glass recycled. So instead of being paid $15 per ton for recycled material, next year the city will likely have to pay some of the cost of the recycling operation.
One of the problems the Greensboro recycling operation has always had is that there is a higher percentage of what is called “contamination” than the national average. Contamination is anything in the recycling stream that can’t be recycled. Greensboro Field Services Director Dale Wyrick said he believes much of the contamination in Greensboro is due to what is called “wishful recycling” which means that when someone isn’t sure whether something can be recycled or not they put it in the recycling container and hope for the best.
For ardent recyclers it seems to make sense to give it a try. They don’t want something to go to the landfill that can be recycled, but the downside is that if it can’t be recycled then someone has to remove that item at the recycling facility and it goes to the landfill anyway.
Currently, it doesn’t make much financial difference to Greensboro if the city is full of “wishful recyclers” because the city gets paid $15 a ton for recyclables and doesn’t bear the cost of the operation.
Wyrick said that under the new contract the city will almost certainly have to pick up some of the cost of the recycling operation, so those wishful recyclers will start costing the city money.
When you consider the cost of a recycling operation, recycling today is an expensive proposition. For example, $65 a ton is a standard cost for a recycling operation. The price per ton for clear plastic (like most water bottles) is $41 a ton. So if it costs $65 a ton to produce and it can be sold for $41 a ton, that is not a successful business model.