Margaret Gainer: Penny Wise, Pound Foolish – April 12, 2011

Tuesday, April 12, 2011

I urge all recyclers to attend the Humboldt Waste Management Authority (HWMA) meeting Thursday, April 14, at 6:30 P.M. in Eureka City Council Chambers. Humboldt County could lose the opportunity to process and add value to its recycled materials, lose a modern recycling facility, lose its 40-year lead organization in the recycling industry, lose 35 local jobs, forgo future business development opportunities, and increase government financial vulnerability. Is this what we want?

On Thursday night, it is likely that elected officials on the HWMA Board will vote to send our recyclables to a Willits hauler. At least half of the HWMA Board attended their first meeting in January and have never dealt with the complexities of these issues before. They need more time to learn about the impacts to our local economy –now and in the future– and to develop a more sophisticated plan to protect our interests.

Their act could bring an end to 40 years of local recyclables processing and will force the closure of a modern materials processing facility on the Samoa peninsula. This is a clear example of when the lowest bid is not the best choice. The HWMA says the lowest bid will save ratepayers money, but this is a shortsighted view of recycling and the local economy. This is not good public policy and is a giant leap backward for several reasons.

First, 35 local specialized labor jobs will be lost if recycling processing leaves the County. Processing recycled materials locally injects $4 million dollars annually into Humboldt County’s economy via wages, local purchase of supplies and professional services, trucking, and equipment repair and maintenance.

Second, selling recyclables is more complex than hauling garbage. This difference makes recycling difficult for government planning. Processed materials are sold for a price that can vary widely with the up-down cycle of international virgin resources. Recycling can be a big money maker one year, and the next year may not. The HWMA’s current predicament is because they have not understood how to develop a formula to make recycling work to local government’s advantage (benefit from up markets). The Willits hauler played the simplistic “garbage game” and gave them a garbage type of price because the markets are going up. Once the markets go back down, they will come back to cover their costs. One of the alternative pricing scenarios proposed by Arcata Community Recycling Center (ACRC) is for local government to benefit from the upside of the recycling markets as long as the base of the costs are covered. This gives local government the benefit of “up” markets while ensuring the collection infrastructure is kept whole. This is how many other local governments have planned for sustainable recycling systems.

Third, in a commodities market, reputation is everything. Humboldt County benefits from ACRC’s market savvy and long track record of selling uncontaminated recyclables. If the Willits contract goes through, our recyclable materials will all be mixed, glass smashed into paper, downgraded in value, like garbage. A mill in Oregon just closed because it could not get the clean materials it needed. A mill in Stockton closed because it takes too much energy to clean up the contaminated paper it received from garbage companies. Are we willing to throw away 40 years of building recycling expertise and marketplace trust for an unknown company without present capacity to handle these materials itself? Do we want to forgo our future options and opportunities that this hard work and reputation has earned?

Fourth, if we lose our local materials processing, we lose future opportunities for local end-use markets, like Fire & Light. If the HWMA board makes this decision Thursday night, we will lose our flexibility and be at the mercy of the wildly variable export market and future value- added recycling business opportunities will be ruined. Good public policy and good business sense is about keeping the flexibility to protect our future interests.

Attend the Thursday, April 14 HWMA board meeting to express your concern. This is a time for local elected officials to put their money where their mouths were and keep the value-added jobs of processing recyclables local. We should not give away our jobs and future business development for a “few cents on the dollar.”

Margaret Gainer is the former executive director of Arcata Community Recycling Center (1976- 1981), past president of the California Resource Recovery Association, and served on the National Recycling Coalition board of directors (1990-1994.) Gainer & Associates provided leadership nationally in the field of recycling economic development.






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