LARGO — For the last five years, the city made about $300,000 annually from its recyclables. The precipitous decline in the recycling market the past couple of years means those days are gone.
So, before that contract with St. Petersburg-based Progressive Waste Solutions expired in February, the city put out two bids for someone to take its recyclables.
The results were not encouraging.
"The first time we bid it out, we got no bids," City Manager Henry Schubert said.The second time wasn't much better, as only one firm made an offer, but it included eight pages of exceptions to the contract, which Schubert said was not acceptable.
Now, the city is altering the contract once again and gearing up for a third try. But, in the meantime, city commissioners recently approved paying Waste Management of Florida $149,000 — or $50 each ton — to cover processing costs through July.
The extra processing costs are being driven by the world's biggest importer of recyclables, China, which has imposed stricter limits on the amount of contaminated materials it is willing to take. Also, the value of the recycled materials, such as cardboard, plastics and metals, has declined, and items like mixed paper and glass have almost no value.
"Ultimately for the recycling program to work, you have to have somebody who's willing to take the recyclables," Schubert said. "But I'm confident that we'll get somebody."
Commissioner Curtis Holmes didn't mince words when discussing the stopgap contract's price tag.
"I have a problem with this of biblical proportions," he said.
Holmes said he would prefer the city take the materials to Pinellas County's Waste-to-Energy facility, where it would be burned at a much cheaper cost.
"I just can't see paying them (Waste Management) $50 a ton when we could take it over to that resource recovery plant for $30," he said. "It just makes no sense. To me, this is a waste of tax money."
That number, however, is actually $37.50 per ton for the county to take it, according to Schubert, and is scheduled to go up to $39.75 on Oct. 1. It also will increase by 6 percent each of next three years.
Depending on a potential contract, Schubert said the decision to save money by having the county burn recyclables or pay extra to process them will ultimately be a policy decision for the City Commission.
Mayor Woody Brown said the extra money is still worth it.
"This isn't a unique situation to Largo," he said. "A lot of cities around here have decided it's worth the extra $10 or $12.50 … a ton so that this stuff doesn't end up in our landfill. And hopefully the market turns around for recyclables soon."
Brian Usher, the city's longtime public works director who retired in February, agrees that patience is the best tactic, but it may take about two years before more domestic capacity comes online.
"It's obviously far more expensive to process the recycling right now than it is to just take it and burn it at the county or dump it at the county," Usher said. "But I really think that as stewards of the environment, we have that obligation to not just jump and suddenly do a knee-jerk reaction and change our program."
The extra expense wasn't unexpected, he said, which is why the city increased its solid waste fees in October. The 20 percent rate hike, which was the first since 2007, cost the average homeowner about $42 annually and was expected to net the city about $2 million each year.
"Those rates would cover any additional costs, at least for the next couple of years," Usher said. "So, I hope the city sees that and decides to kind of ride this wave out a little bit, not unlike we had to ride out the recession a few years ago."
Holmes said the city may have to alter its program to remain sustainable, suggesting residents throw away newspaper and mixed paper, so it gets incinerated, while still recycling metal and cardboard.
Schubert said the city has found a taker for cardboard, which will still need commission approval, but the future is uncertain if other deals can't be worked out.
"We may have to change direction as to what items we even accept to be recycled," he said.