Santa Monica’s recycling program was poised to continue business as usual.

The Allan Company, the city’s recycling contractor since 1993, was about to receive a seven-year contract extension and continue operating processing and buyback centers at City Yards, the City of Santa Monica’s industrial site.

Two problems: Construction on a long-anticipated renovation of City Yards would begin the following month and the cost of recycling per ton would almost triple from $25 to $67 under the new contract.

The new contract called into question how the recycling center would fit into the yards and how the City would deal with China’s decision to stop taking American recyclables. Before China decided to stop importing recyclable material almost two years ago, the City brought in $300,000 per year from its recycling program. It now pays $275,000 per year to sustain the program. Allan Company’s new contract would have cost $1 million per year.

Committing to a seven-year contract that included rebuilding the Santa Monica Recycling Center with a substantial investment in new equipment during such a significant and expensive change in the status quo rattled Mayor Pro Tempore Terry O’Day.

“A long-term contract in the current market and the changes to City Yards is really hard to get your mind around because there’s a ton of risk there,” he said.

Under the proposed contract, the Allan Company would rebuild its processing and buyback centers on the south side of City Yards. Recyclables from the city’s blue bins go through the processing center, while the buyback center pays people who bring in recyclables, such as glass bottles.

For O’Day, it only made sense to put the processing center on the site. He believed the City should look for an alternative location for the buyback center.

“The south side of City Yards is highly industrialized,” he said. “There are trash trucks, street sweepers and 18-wheelers transferring material in and out. It’s not clear that having folks walking up with shopping carts full of bottles or even dropping off recyclables in their cars is safe or desirable in that location.”

The contract also required Santa Monica to reduce the amount of non-recyclable items put in the city’s recycling bins. Only 20 percent of the materials brought to the recycling center could be considered contaminants. Currently, 30 percent of the content stream is contaminated.

O’Day said it was hard to see how the City could achieve that reduction without higher-level planning and strategy.  

“We’ve got a zero waste by 2030 goal, and if you think about what we’ve actually been doing, we’ve been sending our waste to China, 30 percent of which is actually trash, and we call it recycling,” he said. “I don’t want to do that anymore. We need a strong strategic outlook on achieving viable zero waste.”

Councilmember Greg Morena said purifying the stream of recyclable material would bring unforeseen costs, such as educational outreach to residents and businesses.

“This is a significant hurdle. We do not have a good history of producing high-quality recyclable material,” he said. “It’s really difficult to get people to change their mind and change their process, and that cost could be significant.”

City Council voted Tuesday to reject the Allan Company’s bid, as well as a competing, less expensive bid from American Reclamation, and look for another company to temporarily process recyclables offsite while the City irons out where to put the buyback center and its overall recycling strategy. The current buyback center will close by the end of June.

“We are exploring how to work with a recycling contractor on a month-to-month basis for processing recyclables for the short term,” said City spokesperson Constance Farrell. “No matter the outcome, the City will continue to process all blue bin recyclables whether onsite or at another location.”

Mayor Gleam Davis said the process to find another longer-term contract would probably take about 18 months to two years. In the meantime, a temporary contract would likely cost about $500,000 annually, O’Day said.

“We know that there’s an expense to having a temporary solution … the cost will ultimately be passed onto residents and businesses,” he said. “We’re willing to pay for it now because there’s a value for the flexibility to deal with risk and changes, but we don’t want to do that for long.”

madeleine@smdp.com

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