Dip in recycling market hurts Windham Solid Waste
BRATTLEBORO -- On a recent morning at Windham Solid Waste Management District, employees on an elevated platform quickly and nimbly sorted through a steady stream of recyclables passing by on a conveyor belt.
And there was no shortage of work awaiting, as a mountain of plastics, glass and cans covered the floor below.
But lately, that pile is getting smaller. And the material that does come through the door at the Old Ferry Road facility is worth significantly less than it was just a few years ago.
It's a "double whammy" that is hurting the district's bottom line, Executive Director Bob Spencer said. Eventually, that will mean the district's 19 member towns will have ante up.
"The district has a per-capita assessment, and last year we reduced it 5 percent for all the towns because revenues were very strong," Spencer said. "But now the commodity market is down, so whatever we don't get in revenue, we have to go back to the assessment. We don't know what that number will be yet, but it's going to be up."
In addition to the much-discussed effects of a sour economy -- unemployment, foreclosures, businesses failing -- those in the waste industry see another discouraging trend.
"Trash generation is down because of the economy -- people buy less stuff," Spencer said. "It's an industrywide phenomenon. So generally, it's a 20 percent reduction in trash."
That means there also are fewer recyclables. And that's bad news for Windham Solid Waste, which is in the recycling business.
"We're down around 5,000 tons (for the year), from a peak of 6,000," Spencer said.
Adding to that problem is a diminished market for recyclables.
Spencer said glass has no value; the district crushes and screens all recycled glass into an aggregate that is given away to contractors.
But the district sells all other recyclables, and prices are down across the board. That includes the resale value of metals and plastics, though the latter material -- which is petroleum-based -- has not fallen quite as much due to petroleum prices remaining relatively high, Spencer said.
The biggest hit has come in the paper market. With some of the district's recycled paper products ending up as far away as China, administrators "play the market" each month searching for the best price, Spencer said.
But in the end, the district is at the mercy of a cyclical economy.
"It's based on the world economy -- literally, what China buys or doesn't buy -- how many paper mills they are running or not running," Spencer said.
Administrators are no strangers to such downturns. Spencer noted that, after the economic collapse of 2008, "the commodity market for recyclables just crashed."
"As the economy has recovered in the last couple of years, the prices have come back up," he said.
With prices and quantities having fallen again, however, the district has taken a big hit. Spencer said revenues for fiscal year 2013 are projected at $500,000, down from $800,000 in fiscal 2011.
"On a total budget of around $1.4 million, that's a significant percentage," he said.
Waste-management districts essentially are set up as municipal governments, with the power to tax. So as administrators draw up the Windham district's budget for fiscal 2015 -- a task that will be finished by the end of this calendar year -- they'll be factoring in a higher, still-to-be-determined charge for each member town.
"Whatever we don't cover in commodity sales ... we then go back to the towns on the per-capita assessment," Spencer said.
Of course, any economic upturn could reduce the towns' assessment in coming years. And Spencer said other factors also could have a positive impact on the Windham district's budget.
For instance, he is looking to boost the district's recycling intake.
"We want to increase the tonnage coming in here. And I'm looking to get other towns to bring recyclables to us," Spencer said. "We already get them from Chesterfield, N.H. We get them from some towns outside the solid-waste district, to the north in Vermont. I'd like to add some more."
A new state law may play a big role, as well. In an attempt to drive up recycling rates, the Vermont Legislature in 2012 approved a statute that -- among other provisions -- mandates that all garbage haulers also must pick up recyclables by July 1, 2015.
"No one knows how much it's going to influence or impact recycling," Spencer said. "But let's just say it's moderately successful and increases it by 20 percent. That could offset the reduction we've already had."
The district has been working with local haulers who are concerned about the impact of the new law on their business costs. Officials have said the law may be "tweaked" before 2015 to address some of those issues.
But Spencer thinks it ultimately will stand, noting that the measure received widespread support.
"It was unique. It was something that everyone got on board with -- Republicans, Democrats, Progressives," Spencer said. "It was the right thing to do, but it was also responding to the fact that Vermont was going to lose one of (the state's) two landfills."
One thing that has not changed, Spencer added, is the district's commitment to a "clean" product. Bucking an industry trend, the Windham district has continued to collect and process paper products separately from other recyclables.
That "dual-stream" process makes the district's paper products more marketable, he maintains.
"So we had a competitive advantage this past year when the markets were slow. Even though the prices were down, we could at least sell everything we produced here," Spencer said.
"It's cleaner. We have mills that want our product," he said. "And we're really proud of it."
Mike Faher can be reached at email@example.com or 802-254-2311, ext. 275.
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