Who Profits from Florida's Mandatory Recycling Programs?

By: Marianela Toledo FloridaWatchdog.org | Posted: November 30, 2013 3:55 AM

Can county governments run their own recycling operations and actually make money?

The answer depends on the county.

Last year, according to the Solid Waste Administration, Palm Beach County brought in around $8.5 million collecting and then reselling residents’ and businesses’ trash. Some of the most lucrative Dumpster diving took place at Wal-Mart and Publix stores.

But to reach a profit, officials must face what private businesses deal with every day: risk. In this case, it’s the dreaded “diversion rate” -- a measure of how much recyclables are being collected versus how much ends up being used.

A recycler takes a hit when reusable trash ends up being too contaminated and must be hauled off to a landfill. The price consumers will pay for a recycled product is also uncertain.

“We haven’t lost anything (money), but we operate our own landfill,” said Sandy Lee, director of solid waste management in Palm Beach County.

But not all Florida counties operate the same way.

Most solid waste collection and processing in the state is performed by a handful of private recycling firms. But that doesn’t guarantee a good deal for taxpayers.

According to a report issued by the University of Miami, private firms have different financial objectives and lack the institutional transparency required of public enterprises.

The money trail

Counties also differ in how they operate recycling programs.

In most counties, recycling is required by local law, but at a cost to residents. Fees can run anywhere from $25 to $500 a year. Costs are usually passed on to homeowners either as an add-on to their monthly garbage fee or as a lump sum on their property tax statements.

In Miami-Dade, Broward, St. Lucie, Martin, Okeechobee, Palm Beach, Collier and Lee counties, among others, residents are required to use bulky green collection bins. That charge is added to sewer and water bills.

But any profit made from selling recyclables typically goes back to the private companies under contract. Residents don’t recoup a dime.

Watchdog.org reviewed several county contracts involving Waste Pro, Waste Management and Treasure Coast Refuse, three of the largest waste management firms in the country.

According to St. Lucie County’s contract with Waste Pro, “the contractor shall at all times hold title and ownership to all recyclables materials collected by contractor” and “shall retain the revenues obtained from its recyclables and equipment.”

Okeechobee County’s contract with Waste Management also tilts to the contractor.

“The contractor shall be entitled to all revenues generated from the disposition of the recovered materials and shall also be responsible for all charges associated with said disposition.” In this case, the silver lining is that the firm doesn’t charge homeowners for recycling.

The city of Fort Pierce, in St. Lucie County, takes care of its own garbage. But this year the city initiated a recycling contract with Waste Management that includes profit-sharing from the sale of recyclables.

In Indian River County, Treasure Coast Refuse Corp. and Waste Management are the main players. Residents pay for the recycling program, and the county pays for blue and green trash bins.

“We collected 11,254 tons of recyclables and we made $410,453 in 2012 calendar year,” said Himashu Mehta, managing director of Indian River County’s solid waste disposal district.

In Lee County, almost half a million tons of material is recycled annually, according to Lindsey J. Sampson, director of the county’s Solid Waste Division. But most of the material was recycled by private companies, so there’s no firm figure on exactly how much waste was saved from the landfills.

At the county-owned recycling facility, about 68,000 tons of material was received, of which 80 percent to 85 percent was recycled. The remainder, if combustible, is shipped to the county’s waste-to-energy plant where it is burned.

In Miami-Dade, the state’s most populous county, 13 of the 35 municipalities participate in recycling.

The county operates its own recycling plant and has a few of its own landfills.

Miami-Dade Mayor Carlos Gimenez said fiscal year 2011-12 was the most successful in the program’s four-year history with $720,568 in revenue received from 62,997 tons of recyclable material. However, the Florida Department of Environmental Protection shows 1,826,184 tons were recycled.

DEP told Watchdog.org they do not keep track of the diversion rate -- the amount of recyclable material collected and the amount actually recycled -- the only performance indicator for recycling.

In fact, Watchdog.org could not find any meaningful measure showing a positive return on investment from recycling programs. That’s surprising for a state with so much mandated recycling and a 75 percent recycling target rate.

Dawn McCormick, a spokesperson for Waste Management, said that’s because cities and counties can have different contracts. “It’s important to compare apples with apples,” she said.

“It is true in same cases (local governments) keep the profit of the selling of those commodities, and in other cases we share the profit with the municipality,” McCormick said. “But cities negotiate those contracts for the best benefit of their residents.”

Contact Marianela Toledo at Marianela.Toledo@FloridaWatchdog.org twitter @mtoledoreporter. William Patrick contributed to this story.

Comments (2)

11:16PM DEC 1ST 2013
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Charles Muszynski
10:50AM DEC 1ST 2013
An interesting start to a story that has needed complete disclosure for decades. Florida's "garbage system" is administered under FS 403 and it was created way back in the 1980s by intense lobbying from the League of Cities, Association of Counties, AIF, and the major waste companies. It created a closed, disposal/burning-based handling system that cast in place an earnings scheme for haulers and governments with minimal thought given to recycling or advances in management systems.

Florida Trend did a nice article in November of 2000 titled "Dumped On" that discussed how large garbage companies and local governments cooperatively design collection, processing, and disposal systems to prolong sweetheart deals for the benefit of both and to the detriment of citizens and businesses; economic profits (beyond marketplace returns) for the companies, campaign contributions and favors for the politicians, and revenue bonds and taxes for localities.

The article assumes, as many local governments do, that recyclables are "owned" by the government(s). This is STILL American and, in fact, they're commodities, just like gold or pork bellies, that are privately owned by their consumers. This has been ruled on by a Federal Appeals Court yet many local governments continue to illegally enforce ordinances on businesses claiming they don't have a right to their materials.

The REAL story is the multi-billion dollar investment in landfills and waste incinerators local governments and waste haulers want to continue to use and profit from while simultaneously, actively DISCOURAGING recycling efforts; every pound diverted to recycling is a pound that can't be taxed or charged for disposal since taxes can only be levied on "solid waste" under the guise of protecting the public's "health, safety, and welfare".

Of Florida's 67 counties, 15 produce 80% of its waste stream and, generally speaking, those counties are among the most abusive, bureaucratic, and least environmentally friendly. Miami-Dade, for instance, even has "garbage police" with badges to intimidate businesses into using unnecessary services in order for the County to claim state monies for meeting "recyclables diversion rates". We're from the government and we're here to help you....

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