City Compacts Recycling Rates

By Chris De Benedetti, STAFF WRITER

UNION CITY — Although it may cost Union City up to $150,000 in the 2006-07 fiscal year, commercial recycling rates have been reduced by 50 percent effective Jan. 1.

City officials say the decision will further encourage businesses to recycle, allowing Union City to reach state- and county-mandated waste diversion rates and to remain friendly to local businesses.

The City Council, after a recommendation by Deputy City Manager Tony Acosta, voted Dec. 13 to approve the rate reduction. That change came just five months after a new franchise agreement between the city and Allied Waste Services of North America had begun in July.

Before that, the city’s collection and processing of commercial recyclables was an open market where Union City businesses were free to choose any recycling company they preferred, or could choose not to recycle at all, Acosta wrote in his recommendation to the City Council.

The franchise agreement, which had Tri-CED Recycling collecting for small companies and Allied Waste collecting for the larger ones, started during the summer.

But soon afterward, the business community started complaining about the significantly higher recycling costs, Acosta said.

“A number of businesses provided some documentation to us that they were paying a lot less during our previously unregulated situation,” he said, adding that he could not provide an exact percentage of complaining companies. “They made it clear that our rates had exceeded the market.”

The city’s goal all along had been to encourage commercial recycling, but the first franchise agreement that took effect in July unintentionally had the opposite effect.

“We didn’t want to create a disincentive for businesses (to recycle),” he added. “Businesses start talking about relocating to another city.”

The change, however, will come at a price.

A report prepared for the city byconsultants Hilton Farnkopf and Hobson estimated slashing commercial recycling rates by 50 percent would result in a reduction of Allied Waste’s revenues totaling $60,000 to $74,000 for the remainder of the 2005-06 fiscal year. The cost would be $125,000 to $150,000 for the 2006-07 fiscal year, according to the Walnut Creek-based consultants.

The city will pay for Allied Waste’s loss of revenue, Acosta said. “It will be subsidized by the city through a solid waste tax account that we have already been collecting for many years,” he said. In a report provided to City Council members last month, Acosta stated the tax account can fund rate reductions for the entire term of the franchise agreement, if necessary.

Another motive for the city to strongly encourage — and even subsidize — commercial recycling lies in waste diversion rate targets mandated by the state and county. The bill, known as the Integrated Waste Management Act when it was passed in 1989, required that at least 50 percent of a city’s solid waste be diverted from landfills by the year 2000.

While Union City’s waste diversion rate has been between 53 and 62 percent the past four years, according to Acosta, the city hopes to comply with the Alameda County Waste Management Authority and Recycling Board’s goal of having a diversion rate of 75 percent by 2010. That standard was set by a county audit mandated by Measure D, which Alameda County voters passed in 1990.

“The more that is recycled and the less that is thrown away, the better our diversion rate,” Acosta said. “The franchised approach is a small price to pay (to) generate higher levels of recycling.”