Off the Kuff Rotating Header Image

Recycling contract impasse

Uh, oh.

The city of Houston’s curbside recycling program could be put on hold after negotiations between Waste Management and Mayor Sylvester Turner’s office reached an apparent impasse over a new contract Tuesday.

Though Turner said he remains committed to recycling and his office said he will be “pursuing any and all available options” before the current contract expires March 16, the standoff could see Houstonians’ recyclables trucked to a landfill as early as next week.

The mayor acknowledged the breakdown Tuesday after Waste Management rejected Turner’s attempt to shorten a proposed four-year contract extension to one year.

“They control the market. It’s like a monopoly,” Turner said of the Houston-based Fortune 500 company that long has held the city’s recycling contract. “I support recycling. But asking people to accept a bad deal now and in the future is not good business, and I’m not prepared to allow the city to be hijacked by Waste Management or any one company. I want a good deal, but I also expect people to be good corporate citizens and not utilize their monopolistic status.”

[…]

Waste Management for years has been processing and reselling Houstonians’ recyclables, taking a $65-per-ton fee from those revenues and giving 70 percent of any money left over to the city. If the firm’s costs exceeded the fee the city paid, Waste Management swallowed the difference.

With plunging oil prices dragging commodities below $50 per ton, however, the firm has been renegotiating contracts. The deal before council, which was being negotiated before Turner took office, would see the city pay a processing fee of $95 per ton for at least four years. Turner’s office said he now agrees with council that such a term could trap the city in an unfavorable rate even after the market recovers.

Turner instead had sought to shorten the deal to one year in exchange for a higher, $104-per-ton fee.

Waste Management rejected that deal Tuesday, shortly before the mayor faced residents pleading with the council not to end the city’s recycling program only one year after it was expanded to give all homeowners the popular 96-gallon green bins.

|
See here for the background. The Press has an explanation for why we are in this predicament.

Melanie Scruggs, program director for the Texas Campaign for the Environment, says a major pratfall with Houston recycling is Waste Management’s monopoly over the city.

“Dallas owns its own landfill and they have a recycling facility at the landfill, so it’s a win-win for them,” says Scruggs. “Austin, in addition to a citywide recycling ordinance, has two different companies: one on the north side of [the Colorado River], and the other on the south side.”

“There’s not a competitive market for recycling in Houston. Waste Management is the only one in town and it puts the city in a difficult decision,” adds Scruggs. “The city of Houston is trying to put as much pressure on Waste Management for a shorter and cheaper contract because they want to save money.”

I don’t know what the solution to this is if Waste Management won’t go for a shorter-term deal, which I think the city is correct to pursue. Not recycling isn’t an option, unless you really want to see Houston get another large round of negative national publicity. The timing of this just couldn’t be worse, and we’re a week away from the current contract expiring. It’s a mess. For those of you who want to do something that might help, the Texas Campaign for the Environment has a customizable email message you can send to the city. Calling your Council members (district and At Large) is never a bad idea, either.

Related Posts:

5 Comments

  1. Paul Kubosh says:

    Bravo Turner….I couldn’t agree more. It is about the expense! Shared sacrifice by all parties.

  2. Steve Houston says:

    Sending emails or calling city councilmen to pressure them to cave in to Waste Management’s demands is a bad move for the long term. It is also naive of Ms. Scruggs to think the city has the resources to build a recycling facility at this time, one of her quests on social media I believe. Just tell residents that recycling is on hold for now, look for a suitable alternative company to set up shop with a fairer rate structure to both parties based on a longer term, and make it clear that Waste Management can be sent packing if they are not reasonable. It’s not fair to expect them to take a loss but neither is it wise to let them recoup previous losses moving forward either.

  3. C.L. says:

    I’m going to go out on a limb here and say there was very little competition when WM got the contract to begin with, and even less competition now. Props to City Govt to want to save some cash, but WM could easily walk away and not blink an eye [easy when do when you’re not making much profit off the enterprise]. You were paying $65/ton, they want $95/ton – why not split the difference and offer then $80/ton for two years, then spend that two years bribing someone else to take it on ?

  4. What else could we expect from a City council that wanted their term limits extended, but wouldn’t let us vote on the revenue cap.

    And, 2 female mayors later and city employees still don’t have basic paid maternity leave.

    We’ve got harvard law and uh mba grads running for city council in the 4th largest city, yet they won’t talk about REAL ideas or solutions.

  5. […] here for the background. I don’t know what Mayor Turner has in mind, but I can’t wait to […]