Fresno contract leads to lost recycling revenue

California city’s four-month delay means up to $2.7 million less going into city’s treasury, according to the Fresno city manager.

The City Council of Fresno, California, and its city manager could not agree on a citywide recycling contract in October 2015, and the four-month delay has reportedly led to considerable lost revenue for the city.

According to an online news article by the Fresno Bee, City Manager Bruce Rudd proposed a contract with Mid Valley Disposal, Kerman, California, that was rejected by the city council. That deal was rejected by council reportedly because legislators wanted the city to use more than one company to collect its recyclables.

On Feb. 25, 2016, the Fresno City Council voted 5-2 to approve a recycling contract with both Mid Valley Disposal and with Fresno-based Cedar Avenue Recycling and Transfer Station (CARTS).

City administrators are saying, however, that the council-approved set of contracts “will cost the city around $2.7 million in lost profits because [council] turned down a much higher rate” for collected materials in the proposed October contract, according to the Bee.


According to the news article, the October Mid Valley contract had offered $10 per ton paid for the recyclables over a 10-year period. Now Fresno will receive an indexed amount unlikely to be more than $2 per ton.

Rudd says he negotiated for two years to receive that rate from Mid Valley. “We worked hard for two years to get to this point. You’re squandering all the hard work and successes we’ve had in the past,” he told city council, according to the Bee.

One of the two dissenting council voters added, “The elected body shouldn’t be issuing trash contracts because we don’t have experience in the industry. I trust a professional city manager and waste industry consultants to come up with the answer.”

The ongoing loss in commodity values played a role in Mid-Valley lowering its bid and in CARTS asking to be paid to accept residential recyclables. Council members, with knowledge that a previous recycler had paid $18.50 per ton for materials, thought they could negotiate a higher figure for 2016.

The Bee quotes Richard Caglia of CARTS as telling council members, “The (recycling) market is worse now than when you were paying for pickup.”


Get curated news on YOUR industry.

Enter your email to receive our newsletters.

Loading...