Burbank officials have set a self-imposed Nov. 15 deadline to hammer out a deal with a new operator for the city’s recycling center — even if the prospective newcomer was selected by the current contractor who is accused of making almost $33 million in fraudulent claims.
City officials cut ties with Burbank Recycling Inc. in March after the state alleged the firm submitted millions in fraudulent recycling claims. Under the terms of its contract with the city, Burbank Recycling is permitted to choose its successor. If the city agrees, it gets $150,000 to cover the expenses of transferring the operation, Public Works Director Bonnie Teaford said.
In this case, both parties agreed on the chosen successor, Burrtec Waste Industries Inc., a Fontana-based recycling operator that has a clean record and is financially sound, according to Burbank officials.
Burbank Recycling Inc. has been operating the center until a replacement is found.
A sticking point in negotiations is the length of the contract and fears of how the state investigation into Burbank Recycling will impact Burrtec’s own operation in the years to come.
Teaford said Burrtec officials are concerned that Burbank Recycling has operated the center for so long amid the allegations that the California Department of Resources, Recycling and Recovery — known as CalRecycle — may not grant Burrtec certification to operate the facility for up to five years.
Therefore, Burrtec has proposed that the contract, which has 3 1/2 years left on it, be extended another five years so the company would receive California Redemption Value funds for at least another three years on the end of the current agreement.
But most Burbank City Council members didn’t support such a lengthy contract during their Oct. 25 meeting.
Teaford said city officials will try to renegotiate a deal with Burrtec, though she would not give details on Monday.
“Nothing has been laid out on the table yet,” she said. “But city staff is very motivated to move this along quickly.”
CalRecycle’s decision on certifying the Burbank center will be subjective and take into account a variety of factors, said the agency’s spokesman, Mark Oldfield.
CalRecycle could turn down the request if it finds that past alleged violations by Burbank Recycling and owner Geoff Folsom are too egregious, Oldfield said.
In that scenario, Burrtec wouldn’t receive CRV funds for bottles, glass and cans. It could take commercial loads of cardboard and paper and convert some materials to scrap, Teaford said.
Burrtec could also take cans, glass and plastic to another certified processing facility, but it would have to cover the associated costs, such as transportation, she added.
Councilman David Gordon asked why the city can’t wipe the slate clean, go out for bids and sign on with a company that’s not involved with Burbank Recycling at all.
“Let’s stop this exchange and coziness with one agent going into another and recommending [them],” he said.
But Teaford said city officials vetted Burrtec thoroughly and found no evidence that Folsom has any connection with the company.
If the city selects a different contractor, Burbank Recycling could become adversarial and close the recycling center, she added. Then liability issues could arise because the company’s equipment would be inside the city-owned facility.
Folsom could also decide to file for bankruptcy, further complicating the matter and drawing out a resolution, said Senior Assistant City Atty. Terry Stevenson.
In August, the state stopped reimbursing Burbank for its curbside recycling because of the fraud charges against Folsom and Burbank Recycling.