HWMA May Buy Out Crippled ACRC – July 26, 2011
HUMBOLDT – The Arcata Community Recycling Center (ACRC) will re-enter negotiations on the sale of its Samoa processing plant at a time when it’s about to lose a big chunk of its municipal business.
Confirmation of the ACRC’s tonnage losses was seen at the June 14 meeting of the Humboldt Waste Management Authority’s Board of Directors, which voted to approve a five-year recycling contract and Memorandum of Understanding (MOU) with another company, Solid Wastes of Willits, by a four to two vote.
Boardmembers Michael Winkler and Sherman Schapiro dissented.
Before it took that action, the Board approved having staff and two board members negotiate with ACRC on the sale of its Samoa facility to the Authority. Some observers of the situation view that as a move toward local control of recycling while others think it’s an attempted bail-out of a fiscally weakened ACRC.
During a public comment session, there was speculation on whether the turn of events will bankrupt ACRC or cripple it. Downsizing is certain, as ACRC will soon lose Eureka’s recycling tonnage, the county’s tonnage from the greater Eureka area and tonnage from the Authority’s recycling drop-off station.
It will continue to process recyclables from Arcata and Blue Lake, as representatives of those cities have supported maintaining business with ACRC.
Before completing the bidding process that saw the Willits company substantially best ACRC, the Authority tried to negotiate purchase of the Samoa plant. Agreement on price terms couldn’t be reached.
Mark Loughmiller, ACRC’s executive director, said that now, a sale of the facility is “one of several options” that can be explored.
Several Arcata residents said recycling is a public service that should be delivered under a unified “integrated waste management” strategy. But other speakers emphasized the role of competition in limiting costs.
John Murray, a former County Administrative Officer, questioned why the Authority would pursue recycling when there’s no shortage of privately-owned companies that are interested. “Let private industry do what they can do because government isn’t going to do it cheaper in this instance,” he said.
The majority approval of entering negotiations was realized relatively quickly. Approval of the contract with Solid Wastes of Willits (SWW) and the associated MOU did not happen as cleanly.
A sticking point was the reluctance of some board members to abide by an apparent condition of the MOU – to commit the 1,500 to 1,800 tons per year of recyclables collected at the Authority’s Eureka drop-off facility to SWW.
Boardmember and County Supervisor Virginia Bass asked SWW representative Emmett Jones if sending the recyclables to ACRC would be a “deal-breaker.”
“We see this vote on the MOU as a ‘thank you’ for all the professionalism and all the hard work we’ve put in and to vote otherwise would be very difficult for us to accept,” he replied.
Boardmembers struggled with the idea of subtracting more tonnage from ACRC and in a move that perplexed Jones and some members of the audience, the Board voted on the contract and MOU and assumed that a second vote could be taken on the drop-off recyclables issue.
An atmosphere of confusion tinged the follow-up discussion on the recyclables. Jones told the Board that a condition of the MOU is to commit the authority’s drop-off materials to his company.
Jim Test, the authority’s executive director, said it’s “kind of a gray area” as the MOU is “actually ambiguous.”
A rambling discussion ensued, with boardmembers asking whether or not Jones was right. Explanations were vague and a motion was made to have staff consider which company to give the recyclables to and report back at the board’s September meeting.
“Is this a sneaky way of getting around this contract?” asked Boardmember Bud Leonard of Rio Dell. There was some low-level muttering among his colleagues and Leonard added, “That’s what it looks like to me.”
Nancy Diamond, the authority’s attorney, offered more information. “The problem that I have is that although the MOU is ambiguous, the intent when the contract was negotiated was that the flow from the drop-off facility was going to go to (SWW) and it’s a new development, to take it outside of that,” she said.
The motion drew a three to three tie vote and failed.
Things might have gone differently had Councilmember Linda Atkins attended the meeting. Although the Eureka City Council approved contracting with SWW, Atkins disagreed and has supported ACRC during recent hearings.
She wasn’t at the meeting and her alternate, Eureka Councilmember Lance Madsen, cast one of the four votes needed to approve the contract/MOU package and one of the dissent votes on the follow-up motion.