In The News

ACRC Competes in HWMA's Bid Process to Continue Handling Recyclables

Background

Arcata Community Recycling Center (ACRC) is bidding to process Humboldt County recyclables. This will continue ACRC's 40 year tradition of diverting recoverable materials from the waste stream.

The past three years have been challenging for ACRC. Market values for recovered materials plummeted causing a loss of over $600,000 processing the community's residential recyclables. This caused ACRC to institute its first ever tipping fee for recycling.

In ACRC's proposal now being considered, ACRC offered a formula for calculating payments to municipalities (for recyclables) that would re-set annually. If accepted by the municipalities there would be no cost for recycling beginning July 1, 2011. The competing bid by Solid Waste of Willits offers to pay $8 per ton fixed for 5 years. ACRC does not believe it prudent to lock in rates for a five year term. Previously ACRC paid municipalities $10 per ton for recyclables. ACRC believes that payments to municipalities will likely exceed the $8 per ton offered for trucking all material out of Humboldt County within the term of the Contract offered by Humboldt Waste Management Authority (HWMA).

ACRC believes trucking material through Richardson Grove, giving up rights to over a million dollars in sales revenue annually, and eliminating 35 jobs in Humboldt County is poor policy by our local governments. ACRC brings much benefit to our communities.

Statement to HWMA Board of Directors

The following statement was presented by ACRC Executive Director, Mark Loughmiller, to the Humboldt Waste Management Authority Board of Directors at their January 13, 2011 meeting:

In many communities we now spend more dollars on garbage service than police protection. I would not be surprised if this weren't true in Humboldt County. Public tipping fees at the transfer station exceed $150 per ton. Humboldt County residents will spend more than $8 million dollars this year alone on garbage tip fees. Tonight we are here to discuss recycling in Humboldt County. Recycling is the only part of the garbage system that actually generates revenue.

The processing of the recycled materials generated by this part of the system has been put out to bid. It is important to understand what is truly being considered by you, as elected officials.

ACRC would be applauded if it were an economic development project. Our community will invest $300,000 this year (through tip fees) and will receive over $4 million dollars in economic return. This $4 million multiplies throughout the local economy creating even greater economic stimulus. This is the reality we are discussing.

ACRC employs 35. Payroll and benefit exceeding $1.5 million dollars annually.
ACRC paid out $1.2 million dollars in CRV payments to Humboldt County residents last year.
ACRC spends $500,000 annually with local companies for support services.
Annually, average sale of materials nets $1 million dollars.
ACRC has 40 years of service as a non-profit organization with a board of community volunteers.
ACRC has incubated other companies like Fire and Light Originals and J & T Plastics creating additional jobs outside ACRC's own activity.
Up to 5,000 students a year participate in our educational programs.
ACRC works with various community programs to place displaced/disadvantaged workers. This includes programs at Arcata High School and Humboldt County (WEX). ACRC moved two employees from the WEX program to permanent hire status last fiscal year.
In Eureka, ACRC's costs represent 34 cents out of an average household monthly garbage bill of $26.00; HWMA tip fees represent $13.31 of the same bill.
ACRC paid entities delivering materials for processing $10 per ton until market crash in October 2008. From October 2008 through January 2010 ACRC did not charge and did not pay. During that period ACRC absorbed losses in excess of $600,000 on behalf of Humboldt County ratepayers.

Our competitor was rated higher in experience yet has only processed recyclables since 2009. Our competitor was ranked higher in marketing yet ACRC has much greater diversification in markets. In the market discussion section of HWMA's Intelliwaste report on ACRC it is stated that ACRC receives the "highest market pricing for processed materials." The Intelliwaste report stated that ACRC runs an efficient operation. It states that management was prudent and fiscally responsible with all costs reasonable and justifiable.

ACRC offered an alternative pricing structure that ACRC feels is preferable to the restrictive structure required by the RFP. If this formula were followed we would once again be approaching $0 tip fees by the next rate setting process this spring. This is a comparable price to the competing bid, yet no analysis of the formulated price is considered in the review of bids.

Between 2007 and 2008 public garbage fees increased 77%. The reasons cited included increasing bond costs, increasing fuel expense, inflationary pressure and general economic turmoil. The HWMA passes all its costs to the ratepayer assuming no risk in the system so why is it so incorrect for ACRC to be compensated on the same basis?

So here we are. In ACRC's opinion our community is poorer without what ACRC has built. The organization has done the heavy lifting for our communities.

The Samoa Processing Facility we built, using Humboldt County workmanship, allowed Eureka to avoid state fines for violating AB939. The system we designed has brought curbside recycling to all our residents in Arcata and Eureka.

ACRC has no choice but to accept that the HWMA has now taken control of managing your communities' waste stream. ACRC hopes there is room in this reality for our citizens to continue to enjoy the community benefits created by ACRC.

Thank you.

— Mark Loughmiller