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Mayor introduces new recycling deal

There’s some stuff to like in this, and there are also questions to be answered.

Mayor Sylvester Turner

The city would send all 65,000 tons of bottles, cans and boxes its citizens recycle each year to a new processing facility to be built in northeast Houston under a 20-year deal Mayor Sylvester Turner will present to City Council next month.

The contract with Spanish firm FCC Environmental, worth up to $57 million, would allow citizens to again put glass in their 96-gallon green bins, along with cardboard, newspaper, steel cans, aluminum and plastic.

Turner, faced with a poor commodities market and rising recycling costs upon entering office last year, negotiated away hard-to-process glass in hammering out a two-year stopgap deal with the city’s current contractor, Waste Management.

Council members raised enough concerns about the new contract’s length and cost and the speed at which it was being considered that Turner canceled a Tuesday committee hearing on the topic minutes before it was to begin and pulled it from Wednesday’s council agenda.

Turner stood firmly behind the deal at a Wednesday news conference, however, saying the proposal would not only return glass to the city’s recycling program but also would require FCC to share in the risk of a crash in the commodities market, ensuring the city never pays more to recycle than it would pay to throw the same materials in a landfill.

“When you take a look at what this offers, let me simply say: state-of-the-art technology, a brand-new facility, including glass, capping the floor of what the city would have to pay should the market turn down,” Turner said. “This is an excellent deal.”

Under the proposed deal, if the revenue generated by selling recycled materials is less than $87.05 per ton, the city would pay FCC the difference, up to a maximum of $25 per ton. If the materials sell for more than $87.05, the city would get a quarter of that excess revenue.

Under the current Waste Management contract, the city’s per-ton processing fee is $92, and there is no cap on the city’s costs. Houston’s per-ton costs have ranged between $20 and $53 per ton under that deal.

Prior to the commodities market crash, the city paid a $65-per-ton processing fee.

The FCC contract also would have the city borrow $2.4 million to add eight new trucks to its aging fleet and repay the loan at a 10 percent interest rate. That is significantly higher than what the city would pay if it borrowed the money itself.

[…]

Councilman Mike Laster, who was to chair the canceled committee hearing on the topic Tuesday, echoed his colleague [CM Jerry Davis].

“There’s still a lot of a lot of questions to be answered,” he said. “That gives me concern, and I look forward to doing all I can to get the best information.”

Texas Campaign for Environment’s Rosanne Barone said the contract’s processing fee and the interest rate on the $2.4 million loan are concerning. A broader worry, she said, is whether the contract leaves the city enough flexibility to capitalize on any improvements in its recycling policies in the future. Her group long has pushed the city to adopt a plan that would help it divert more waste from landfills.

“Using taxpayer money to take out a loan for $2.4 million on eight trucks is not a good use of taxpayers’ money at all,” she said. “But the more important message here is, is this a contract that is going to be functional in the long term?”

That processing fee, which was mentioned several paragraphs after the first section I quoted above and not in any of those paragraphs that discuss current and past processing fees, is $87 per ton. Which is a lot more than the previous deal we had with Waste Management, when they took glass and commodities prices were good, but a bit less than what we’re paying now. Like CM Laster, I’d like to know more before I make any evaluations of this. Having glass included in curbside pickup again is good, and having a price guarantee is good. I don’t quite understand the loan arrangement for buying more trucks, and the length of the contract could be a concern as well. Let’s learn more and see what if any options exist to make changes. The Press has more.

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