Revenue falls, but recycling rises

The Baltimore Sun

In September, Howard County got an average of $74 a ton for the recyclable household trash that would have otherwise ended up in a landfill.

Two months later, the county got nothing.

Even as Howard County and other Baltimore-area governments work to encourage residents to recycle, they are seeing a sharp drop in the cash they get for scrap paper, plastic and metal. The bottom line is less money for governments searching for every spare nickel as revenue from other sources drops.

"We're not getting paid," said Evelyn Tomlin, Howard County's recycling chief. "Right now, we're paying $10 a ton to process it."

The back story spans the globe, to the far east. A manufacturing slump in China and India - said to be caused by declining demand for products in the United States - has in turn created a falling demand for the recycled materials used in packaging and shipping.

Wesley Muir, director of corporate communications for Waste Management, a Houston-based solid-waste firm that operates a Recycling America plant in Elkridge, said prices had been trending higher since 2003. But, he said, newspaper went from $125 a ton in July to $25 by October. Aluminum cans fetched about $1.10 a pound in July, but they now bring in 45 cents, according to metalprices.com.

"I think everyone was a bit taken aback," Muir said. "I don't think anyone could foresee this kind of precipitous drop."

Robin Davidov is executive director of the Northeast Maryland Waste Disposal Authority, a regional agency that arranges contracts for disposal services for Baltimore and eight central Maryland counties. She said governments have seen swings before, but not like this.

"We've never seen them this dramatic. They went from historic highs to historic lows," Davidov said.

Tom Kusterer, manager of Montgomery County's recycling plant, said governments have enjoyed a long run of higher-than-normal prices for recycling materials.

"We were pretty much living in the lap of luxury for a long, long time," he said.

Muir said Waste Management announced a 4- to 8-cent per share reduction in fourth-quarter earnings because of the declines. Still, the Recycle America plant is operating full-bore, he said.

The huge building is a cacophony of big, noisy machines connected by speeding conveyor belts equipped with various devices to help sort materials by weight and composition. Along the way, crews of workers frenetically pluck plastic bags from the paper stream and newspapers from among cans and bottles.

Still, government officials in the region say, they remain committed to recycling because it lowers the cost of more-expensive trash disposal and preserves valuable landfill space.

And officials say the long stretch of high prices for recyclables has so far offset the recent drop. Howard County's Tomlin said the higher prices last summer brought in $854,000 of the $1 million budgeted as expected recycling revenue this fiscal year.

Other counties say they're not sure what to expect this year, revenue-wise, but they take solace in the fact that recycling sales are not relied upon to pay the full cost of the collections.

In Anne Arundel, recycling revenues have been about $2.5 million to $3 million a year, less than one-third the cost of the entire program, County Executive John R. Leopold said.

Baltimore County's revenues climbed to $5 million last fiscal year, sharply up from the previous $2 million to $3 million range. That's still just under 10 percent of the total county solid-waste budget.

Montgomery County took in $3.85 million from recycling last fiscal year but expects less this year.

Harford and Carroll counties expect to make less than $300,000 a year from their sales.

"The most important thing to think about is that it was never, ever geared toward being a money-making issue," said Kurt Kocher, spokesman for Baltimore's program.

Despite the price decline, governments in the region say they remain committed to recycling as a way to help the environment and reduce the growing costs of trash disposal. None are talking yet about being left with no choice but to deposit recyclables in their landfills.

That's why the city, like Howard, Anne Arundel and other governments that collect all materials at once in "single-stream" programs, is expanding recycling, adding more items to the collection list.

"We're up to 35 or 36 percent [recycling as part of total trash] because we've gone to single-stream recycling," Kocher said.

Leopold, a Republican, said he's strongly committed to boosting collections despite getting no revenue in November for 3,600 tons of material.

"If we disposed of it [in a landfill], it would have cost $100,000," he said. "It's absolutely essential. It's good for the environment and good for the taxpayers. It saves precious landfill space."

Instead of selling all recycling material commercially, Baltimore and Montgomery counties operate their own recycling plants, and Harford County ships plastic, glass and metal cans to Baltimore County's Cockeysville facility.

Despite lower prices, Baltimore County's plant is operating at full tilt, recycling manager Charles M. Reighart said.

"If it were disposed of as trash, it would cost the county around $37 a ton, and prices are going up," he said.

That's why Howard County Executive Ken Ulman spent $3 million last fall to buy and distribute recycling bins to every county homeowner. He said that in addition to increased recycling collections, landfill trash deposits are down about 10 percent countywide since the bins were distributed.

Howard and Anne Arundel counties are paying $33 a ton to dispose of trash that goes by rail to a private landfill in Virginia. When that contract expires in 2013, they fear disposal prices will double or triple.

"Clearly, the drop in revenues is unfortunate, but markets ebb and flow," Ulman said. "This investment puts us in a position economically to benefit when things go up."

Even Greg Fox, a Republican on the Howard County Council who sharply criticized Ulman's bin purchase, said he strongly supports recycling.

"Recycling is good," he said, explaining that his concern was the expense of buying bins, rather than a cheaper public education campaign.

Carroll County officials said they aren't on the revenue roller-coaster, though.

When prices were high in July, Carroll signed a five-year deal with Waste Management to get $15 a ton. What appeared an undesirable deal then doesn't look so bad now, said Cliff Engle, the county's solid waste bureau chief.

"When we signed the agreement, we knew we were leaving some money on the table, but we like to have predictability," he said. "That looks like a good gamble [now]."

Harford County still collects plastic one week and paper the next in what's called a "dual-stream" collection system.

C. Robert Ernst, the recycling manager, said the county isn't paid for the glass, plastic and metal sent to the Baltimore County recycling center.

But instead of the $80 a ton he was getting two months ago for some kinds of paper, he expects to get $30 a ton by January.

Still, he said, the county is considering switching to a single-stream approach to boost collections.

"We're always trying to expand recycling."

RECYCLING

Recycling, in tons, for calendar year 2007

* Anne Arundel: 330,501

* Baltimore City: 217,026

* Baltimore County: 1,213,330

* Carroll: 44,964

* Harford: 189,427

* Howard: 221,660

* Montgomery: 461,629

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