Information provided to a citizen by Boise City’s Trash Programs “solid waste coordinator” touched off a GUARDIAN investigation revealing Boise is shelling out big bucks for tons of junk.
When a GUARDIAN reader inquired about distribution of revenues (if any) from recycling under the new “Curb It” program, a Boise staffer wrote to her, “It depends on the market for materials. Aluminum always pays but plastics is usually an expense. By contract with Allied Waste, they keep the revenues and pay the losses (bear all the burden). All revenues received by Allied Waste for recyclables helps to keep local collection fees lower.”
We asked the official spokesman for the Public Works Department to explain the funding and financing for recyclables and learned the contract is not at all as portrayed by the staffer.
Bottom line: Boise pays nearly $165,000 a month to collect and ship recycled “commodities” to Portland or Tacoma, but claims a savings of $155,000 in trash that doesn’t go into the land fill for a monthly outlay of about $10,000. The weak link in Boise’s trashy financial outlook is they think prices for paper, aluminum and plastic will go up at a time when Boise alone is generating a 40% increase in “product.”
Simple economic laws of supply and demand are tilted against any increase in commodities prices (to offset shipping costs) since the INCREASING supply is acting to DECREASE the value of the product. Meanwhile the cost of shipping is not likely to go down.
Click MORE for the official response to our request for a paragraph summarizing the details of the contract with Allied Waste.
“The contract between the City of Boise and Allied Waste Services covers both the collection of household waste and the collection and sale of recycling materials. There is a flat rate per household for the collection of household waste; the City pays the landfill costs directly. For recycling, there is a separate flat rate for the collection and sale of recycling materials with the revenue from the sale of recyclable materials used as an offsetting cost component to the flat rate paid to AWS.
When the recycling program was created over twenty years ago, the AWS reimbursement rate for recycling was established by taking the cost of collecting recycling materials and then deducting an annual target revenue from recycling commodities. The commodity price assumption was revisited annually in order to provide for a fair assumption of risk. As Megan Kershner pointed out, this created a system in which AWS would absorb losses or gains during the course of the year as commodity prices fluctuated. However, it is important to note that the following year’s readjustment of commodity pricing would recapture the gains or losses of the previous year to ensure the burden or benefit would be shared equitably between the City and AWS. This was a workable approach until the fall of 2008 when recycling commodity prices changed dramatically.
This dramatic swing in commodity prices warranted a more frequent adjustment than annually. In May 2009, the City Council approved a monthly recycling commodity revenue target rather than an annual assumption that was built into the rates for the coming year. This new schedule was set up to ensure the ongoing financial stability of the entire solid-waste program during a down period in the commodity market.
To address your question regarding the overall benefit/cost of the recycling program –AWS currently is reimbursed $2.39 per household per month for recycling collection and commodity sale. For 69,012 households, this is a total cost to the City of $164,939 per month.
For a fair analysis, this needs to be compared to the cost of disposing of the same material in the landfill. In July of 2009, the city of Boise collected 681.04 tons of recycled materials, which is approximately 1,700 compacted cubic yards. The cost to dispose of this at the landfill is $11 per compacted cubic yard for a total of $18,729.
The cost of collecting an additional 1,700 compacted cubic yards is the other component that must be calculated. In July 2009, the city of Boise collected approximately 5,800 compacted cubic yards of household waste. Under the current contract cost of $6.71 per household (based on 69,012 households on the system) this comes to a total of $463,070 or $79.84 per compacted cubic yard. Using that same cost per unit, adding another 1,700 compacted cubic yards to the system is estimated to cost $135,728 for the month of July. Combine this with the $18,729 for landfill disposal fees and the total is $154,457 per month to dispose of material that is currently recycled.
This is a net difference of $10,482 during a period when commodity prices are at a record low. Across the entire system, this comes to $0.14 per household per month or $1.74 per household annually. As recycling commodity prices rebound and landfill rates increase, a positive return for recycling is almost certain to be realized.
And we haven’t even begun to discuss the positive environmental impact recycling has on our community!
Hope this helps explain.
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