Weathering the Storm

As 2002 gave way to 2003, prospects for a quick reversal in the ailing economy seemed dismal. Unemployment was at 6 percent, and retailers and factories were slashing tens of thousands of jobs right before the holidays. Discussions of war had analysts predicting more difficult economic times to come. Americans were feeling the pinch, both in their wallets and on their curbs.

Last summer for example, New York City Mayor Michael Bloomberg's decision to suspend glass and plastics recycling — and save the city $40 million in the process — was widely taken as a signal of a pending nationwide rejection of recycling. If New York City had to make severe cuts in its waste programs, other municipalities were sure to follow, people surmised. But that was only half of the story.

Certainly, many major cities have recently dealt with budget cuts. In these cases, cities often protect their core operations — picking up and disposing of garbage. Services deemed to be of secondary importance, ranging from recycling to special waste pickups, then were at risk.

Yet other municipal solid waste departments have found themselves somewhat insulated from the economy. Either they are supported by dedicated funds, or they have locked into smart long-term disposal and recycling contracts. Sometimes pure luck makes a city less dependent on more vulnerable sectors, such as manufacturing. So dramatic headlines do not foretell everyone's future.

The Good, Bad and Ugly

The happiest waste departments are those that are not beholden to a general budget. “Quite a few of our members operate as free-standing economic entities, where they're not dependent on government revenues to manage their systems,” says John Skinner, executive director of the Solid Waste Association of North America (SWANA), Silver-Spring, Md. “They charge user fees to the people they collect waste from. So the economy doesn't affect them as much as others.”

Moreover, Skinner adds, solid waste management always has been somewhat recession-resistant. “Waste generation rates are not strongly affected by the economy,” he says. “There's a lot of population growth throughout the country, and people move from one area to another. So some facilities have seen increases [in their revenues].”

A particular concern for SWANA, which offers training on topics such as managing landfills, landfill gas and recycling, is that a down economy would force cities and counties to cut back on education. Skinner says he has seen a slight dip in attendance. “People send fewer people to our training courses, but they haven't cut back entirely.”

As for recycling, when cities such as New York look across the board for opportunities to trim the budget, it can be difficult to forecast the long term. “[Recycling's] benefits are there, but they are hard for the community to see, especially long-term benefits to future generations such as energy savings,” Skinner says. “That doesn't translate into the bottom line. With the recycling markets being soft, they have a difficult time taking the long-term approach.”

Enterprising Operations

For some municipalities, the saving graces are user fees and drop-off recycling. In Lawrence, Kan., for example, a university town of about 90,000 people, the economy has had little effect on the solid waste program. “We are an enterprise fund [program], so we are not funded through the general taxes,” says Bob Yoos, city solid waste manager. “We earn our own way, so as long as our customer base is there, we're OK.”

It helps that the University of Kansas stimulates residential development, especially with retirees. In fact, waste revenues last year were 10 percent higher than expected. The city maintains a recycling rate of 30 percent through drop-off centers. Yoos says Lawrence has focused on the most marketable commodities, in this case newspaper, cardboard and yard waste.

“We call it the hierarchy of materials approach,” Yoos says. “We look at those materials that have the highest recycling rate. Some people are not convinced that you have a meaningful recycling program if someone doesn't come to their curbside and take it away. Our recycling doesn't cost us an arm and a leg, but we collect a lot of tonnage.”

Similarly, municipalities in Delaware have managed to withstand an economic downturn by accepting only marketable commodities at its drop-off centers. The state does not have curbside collection. Cities save on labor costs because residents source-separate recyclables.

“People who participate are rule-obeying, so the material is clean, and you can always find a market for it,” says N.C. Vasuki, CEO for the Delaware Solid Waste Authority, Dover. “We try to look at the market first before we jump into any particular material. That's why we've been able to withstand the ups and downs.”

Although Vasuki will not name a recycling rate, he says that 65 percent of residential households participate in the program, and 95 percent of collected tonnage goes to market.

And like so many local governments, municipalities have looked for ways to do more with less. Vasuki says that user fees in Delaware have remained constant for a decade, while cities have worked to reduce the amount of soil required to cover landfills or looked for sources that will pay cities to take their soil.

“Cities like New York have a totally different problem because New York exports its garbage, so it is more subject to economic forces than those that deal with [garbage] in their own backyard,” Vasuki says. “Big cities are difficult to manage anyway. But well-organized cities are all doing reasonably well.”

Clifton, N.J., another mid-sized town of 80,000, has found economic shelter in long-term contracts. It is only in year two of a five-year garbage contract, although its recycling contract expires in October. Last year, the town made $200,000 on recyclables, and it has been able to add oil, tires and electronics to its recycling program.

Wherever possible, it helps the bottom line if city labor is reduced as much as possible, says Alfred J. DuBois Jr., Clifton's municipal recycling coordinator. DuBois has several suggestions: First, residents should be encouraged to reduce and reuse in their own kitchens and backyards. Second, manufacturers should package items in only the most marketable materials, such as plastics No. 1 and No. 2. Third, DuBois is a strong advocate of instituting a bottle bill in New Jersey.

“If we had a bottle bill in the state, it would cost less for the taxpayer, because residents would be bringing the material directly to the drop-off centers,” he says. Right now, the city relies on residents to source-separate their glass, and the city has the space to store glass that isn't moving on the market.

But if the city switched to commingled collection, it would be more difficult to keep costs down, DuBois says. “It's getting harder because everyone is going commingled, and the day may come when we have to do it,” he says. “It would be better if the state went to a bottle bill. Any cost for a municipality would be less.”

While mid-sized municipalities may be more insulated from economic woes than big cities, rural areas and small towns may be having the toughest time, especially regarding recycling. In Northern California, the California Integrated Waste Management Board, Sacramento, recently approved a reduction in the mandatory diversion goal for certain rural areas because of the economy. Rural Modoc County and the town of Alturas, for example, have suffered from a stagnant economy, a high unemployment rate, budget constraints and a hefty distance to major markets. To ease their burden, the state reduced the county's diversion goal to 13 percent and the town's to 16 percent.

Big City Slickers

Although it is less common, some major urban areas still are doing well. Palm Beach County, Fla., has seen its waste tonnage go up the past two years in a row, from 4.35 pounds per person per day to 4.4. It helps that this is an affluent area with few factories. “Here in south Florida, we don't have a lot of industry,” says Dan Pellowitz, business analyst for the Solid Waste Authority of Palm Beach County, West Palm Beach. “The housing industry has been doing fine, even through the economic downturn. We have a lot of tourism down here, and building and tourism are driving the economy. We have very little manufacturing.”

Yet Pellowitz admits that recycling has declined slightly in the past two years. He attributes this to a natural program plateau, as well as, somewhat ironically, to the volume of new construction. The solid waste authority simply hasn't distributed recycling bins to all the new housing in the area yet, Pellowitz says.

Far more common for major cities, however, is that they've had to tighten their belts, which usually means reducing recycling. In Virginia, the Southeastern Public Service Authority, Chesapeake, currently is considering a major overhaul of the curbside recycling programs in several municipalities in the Virginia Beach area, including Norfolk, Portsmouth and Suffolk. Denver and Dallas have recently considered curbing recycling, too.

Other major cities have sought alternatives to cutting recycling. Budget cuts in Atlanta, for example, have been so severe that Mayor Shirley Franklin has enlisted businesses and volunteers for help in city cleanups. Known as Trash Troops, these groups will help to compensate for the elimination of the $60,000 annual contribution to Keep Atlanta Beautiful and the Clean City Commission.

The Minneapolis Department of Public Works has had its share of cost increases — primarily insurance, union pay raises and truck and fuel costs — although it is supported by an enterprise fund. Consequently, the city has reduced the number of garbage routes from 17 to 15 and has re-evaluated equipment purchases and other opportunities for operational efficiencies, says Susan Young, city director of solid waste and recycling.

Minneapolis is bidding out several services this year, including a recycling processor. In light of budgetary constraints, Young is concerned that large, vertically integrated companies may be less inclined to selectively collect the most marketable commodities for recycling.

“Most of the recyclables processing capacity in the United States is controlled by companies … that are maximizing their vertical integration,” Young says. “If my recyclables are processed by a vertically integrated company, there often will be pressure on the company to ‘vertically integrate’ — landfill — my marginally valuable commodities … It will be very interesting to see if I will have proposals that reflect the quality of my recyclables, or if the vertically integrated companies will be ‘discounting’ my commodities in hopes that I'll consider that price to be as good as it's going to get.”

Houston's solid waste department depends on a general fund, so budget cuts have affected the city's ability to respond to complaints and other administrative services. The city also is not replacing equipment as often as it would like, and has had to close one of its four neighborhood depositories, where residents drop off heavy waste.

“But as far as the bread and butter type services, the economy has not affected those parts,” says Marina Coryat, department spokeswoman. “Recycling is a supplemental service, but we realize that if we cut recycling, it will have an impact on us with the garbage. They work hand in hand.”

In addition to curbside collection, the city maintains two drop-off recycling centers that accept a range of materials. One of these sites collects household hazardous wastes such as oil and paint. To close the loop, the city uses the collected paint for anti-graffiti projects. In October, the city also instituted an “extra capacity collection fee,” which charges people to dispose of any additional trash over the standard 90-gallon container.

In the end, like politics, all waste management is local. Despite national economic trends, cities and towns vary widely in their economic challenges, solid waste programs and future prospects. But the municipalities most likely to weather the storm are those that get citizens actively involved, either by moving their own recyclables or paying extra for disposal. “Sometimes the only way people become conscientious about what goes into their garbage can,” Coryat says, “is when you have fees.”

Kim A. O'Connell is a Waste Age contributing editor based in Arlington, Va.