Headlines announcing funding cuts, scaling-back of services and the regionalization of recycling programs have become common in the past two years. In Wisconsin, newly elected Republican governor Scott McCallum has proposed a state budget that cuts recycling funding by 42%. In Michigan, solid waste company Mister Rubbish has decided to stop curbside recycling service in 15 townships because it isn’t cost effective.
Are rising fuel costs and depressed commodity pricing to blame for recycling’s lack of profitability, or does it have more to do with underdeveloped end-markets and a dated approach to recycling programs?
Despite the sometimes gloomy headlines, many municipal recycling programs are expanding the materials they collect and increasing their diversion goals. Some of these communities are looking to single-stream and bi-weekly collection methods to provide the tonnage and cost-efficiency they need.
Kay Stevens of the Nebraska State Recycling Association, Omaha, indicates that although the association has yet to complete its most recent survey, it appears that out of Nebraska’s 400 recycling programs, roughly 20 programs closed in 2000. “But I’m not sure it can be attributed to energy,” Stevens says. “There are a lot of other factors at work.” One of which is a shortage of resources.
“We’re a large rural sate, and so we have a lot of small rural programs that are heavily addicted to volunteer labor, for one thing. The labor force is getting old, tired and just doesn’t want to do it any more,” Stevens says. In some cases, these communities are able to transition to a program operated by the local hauler or community sanitation department, she notes. In other cases, however, the program ends as the last volunteer exits.
Stevens also finds consolidation impacts the viability of recycling programs because they affect the movement of materials within the state. “Waste Connections has come in and bought out a lot of the small haulers that were doing recycling, and in some cases, they dropped recycling services,” Stevens says of the Folsom, Calif.-based hauling company.
Harvey Gershman, president of the solid waste consulting firm Gershman, Brickner & Bratton Inc., Fairfax, Va., has found that many municipalities are expanding toward a more comprehensive set of materials and higher diversion goals. He cites Montgomery County, Md., and Plano, Texas, as examples. Gershman says that Plano is adding materials and starting to promote commercial recycling. In addition, the city worked with its contractor, Trinity Waste, to modify its MRF to accept single-stream recyclables and a variety of commingled containers and mixed paper from commercial and residential sources in order to reach a 40% diversion goal, Gershman says. Montgomery County is also throwing a significant amount of energy into the promotion of commercial recycling, he adds.
“Nashville has just announced that it is going to implement residential recycling,” Gershman says. “They pretty much have no appreciable recycling programs going on. They don’t have curbside for all their residences. So, they are going from below 10% and are going to try and get toward 30%.” These efforts will include a comprehensive paper recycling component, education and drop-off sites, Gershman says.
Lisa Skumatz, principal of Skumatz Economic Research Associates, Seattle, found that generally very few recycling programs modified their programs by adding or subtracting materials. “But more of them were doing things like changing to commingling,” she said. Often accompanying the commingled collections is a change in collection frequency from weekly to bi-weekly.
Steve Ragiel, vice president of recycling for Waste Management, Inc., Houston, says that a “fair number” of communities have modified their recycling programs by using carts in place of bins to accommodate these twice monthly collections.
STIMULUS TOWARD SINGLE-STREAM
The fuel savings of single stream collections are unquestionable. “It’s very simply that there are fewer on-route collection hours,” Ragiel says. “So, to pick up the same number of households, you are running the truck fewer hours, and that saves on fuel. There is a counter balancing effect in that you use a little bit more electricity in the recycling facility to sort out single-stream. But, on balance, I would say that it’s a more energy efficient approach.”
But, that’s not to say there aren’t glitches. Stevens sees the shortage of equipment and infrastructure as a problem preventing the implementation of single-stream collections because using the garbage truck to collect commingled recyclables is a source of confusion. “There isn’t enough volume to justify putting a $100,000 packer on the road for recyclables in a small community because the expense of running that kind of equipment is so high,” she says.
“In Omaha, they have a separate collection. It’s not exactly commingled, but there is a recycling truck,” Stevens says. In addition to the driver, the recycling truck is staffed with two people who do a rough sort by fiber, metals, plastic and glass at the curb, Stevens explains. Once at the recycling center, the recyclables are sorted further.
Although mechanically sorting commingled material requires additional upfront spending, once installed it represents a fixed cost, Gershman says, and the program becomes less vulnerable to fluctuations in fuel costs.
Notes Skumatz, “We’re finding that commingled programs end up significantly less expensive than programs where materials are picked up in a separated manner.”
According to the studies Skumatz Economic Research Associates have done, commingled programs also bring in more tons of materials. “So, it’s cheaper, and you get more tons, which we thought was the ideal situation,” she says. However, when weekly collections go to every-other-week or a monthly basis, some tonnage is lost, Skumatz adds. She suggests that communities can make up for that lost tonnage by adding a material.
UPPING THE ANTE
Although fuel prices have increased, Gershman believes they are going to come back down, and that these kinds of fluctuating costs should be taken into account when preparing bids. “Your collection agreements ought to provide for adjustments in the change in fuel, not just an increase, but a change,” he suggests. “It’s important to segment out your escalators for the appropriate amount that relates to fuel for the services provided. And that’s not done well enough in a lot of contracting,” he says.
Stevens believes fuel costs are just a red herring. “Well, for one thing, that is being used as an excuse by some haulers to increase their rates. I’m not sure that the increase is proportionate to the increase in costs, in fact, but there’s no way to prove it,” she says.
Markets, particularly those in the more heavily populated parts of Nebraska, are “not all that bad,” Stevens says. “Corrugated is down a little bit, but prices are still better than they have been for a while. And so, I don’t think that low market prices have got much impact right now.” According to the association’s preliminary information, volume and prices are up compared to a year-and-a-half ago. “But local collection infrastructure in the small communities is really stressed,” Stevens adds.
Ragiel says that commodity prices have become somewhat more reliable. “With the advent of pretty secure floor pricing with the paper mills and financial hedging, fixed financial pricing for commodities such as waste paper means the commodity value for the customer has stabilized,” he says. “By stabilizing the commodity revenue available, the program economics overall are improved.”
VALUE IN DROP-OFF SITES
Drop-off sites seem like a likely alternative to curbside collections in areas where recycling funding has been cut. However, Gershman doesn’t believe there will be a big movement toward this option. “I don’t think those reach enough people and create a large enough diversion,” he says, “although the costs can be reasonable for drop-offs. They do serve certain slices of communities-multi-family, often times-or commercial establishments.”
Stevens is a bit more hopeful. “I think that’s always possible,” she says. In Lincoln, Neb., they have no curbside service, only drop-off sites, she explains. “They have more than 20 drop-off locations. In Omaha, they have a curbside program and there are only two drop-off locations. And Omaha has the cheapest collection processing, recycling and composting fees in the state,” she adds, because they have a large contract.
Skumatz also hasn’t noticed a switch from curbside to drop-off programs. “But I have seen extremely efficient and very high performing drop-off programs,” she says. “I think that in many situations they can be extremely efficient. I’ve had a guy tell me that his program was a very humble operation. But, on the other hand, this ‘humble operation’ was delivering outstanding tonnage. So, ‘humble’ it may be, but performance is where it counts,” Skumatz says.
Ragiel finds that drop-off programs are most commonly used for nontraditional recyclables, such as electronic scrap, computers and motor oil.
PERIL FOR RURAL AREAS
Gershman says that rural areas are more susceptible to cuts in recycling services than urban or suburban areas. To prevent this, he suggests regionalizing. “Get together. Get a number of counties to pool their recyclables and offer their materials up to one contractor or one facility so they can get economies of scale,” Gershman suggests. “Create quantity so you can get quality.”
Skumatz suggests that rural areas work with local businesses to decrease the cost of shipping materials out of the area to better markets. She recalls a drop-off program in Kansas that used the back-hauls from the grocery store for shipping its recyclables.
“I know of some remote areas in Alaska where they have done similar kinds of things. They have gotten consortiums of some of the folks that ship things in, but don’t ship things out, to donate their back-hauls as a sort of non-profit thing, and that’s the way they get materials to market,” Skumatz says. “With leadership, you can make it work in many areas.”
Stevens fears that government officials will try to cancel recycling programs in rural areas, citing a lack of efficiency and profitability as the motivation, as a way of avoiding addressing recycling. “I think it’s a specious argument,” she says. “I don’t think it has any legs at all. In an open debate, it wouldn’t hold up, but I’ve heard a lot of horror stories about exactly those kinds of policy decisions.”
Stevens suggests that rural communities form alliances to address solid waste issues jointly and to establish clout. “Rural communities have got to get past the point of competing with each other. They are going to have to start organizing around these issues and then demand diverse service packages, and demand unit-based pricing and demand that they get the kind of service that they want for what they are putting in the pot,” Stevens says. “And rural communities are in a position to do that because they are much closer to their rate payers than they are in big cities.”
Ragiel, however, suggests less frequent collections in rural areas. “What I would look at in a rural area is maybe going to once-a-month collections and giving the customers a cart to hold that volume of recyclables. I also think that approach in combination with drop-off centers is probably a good one,” he says.
MAINTAINING THE SPIRIT
“There’s a lot of talk that people are losing interest in recycling,” says Stevens. “It’s less a reflection of energy markets than that all of our capital and our equipment, land and financial resources are sunk into disposal,” she adds. “Recycling continues to try and eke out an existence without getting its hands on any of those resources. And that’s what is going to have to change. Recyclers resist getting into the politics and economics of disposal because they don’t see what it has to do with them, and I see it as having everything to do with them.”
Skumatz believes that many recycling programs were initially designed by “peer pressure,” and that many communities simply adopted the program used in the neighboring community without regard to demographics. She says communities are now reevaluating their recycling programs. “I think they are designing programs to be more efficient, and they are learning lessons from the information that is out there. That is something that is going to help make recycling programs more sustainable in the long run,” Skumatz says.
Although diversion goals may be good from an awareness and educational perspective, Gershman finds that realistic numbers are most important. “I think good budgets are what you need to keep recycling programs in place; and good staff and good public education to gain and sustain ongoing participation,” Gershman says. “I mean, those goals are only goals and they need programs and budgets to support them.” RT
The author is a staff member of the Recycling Today Media Group and can be reached at dtoto@RecyclingToday.com.