Ever since Ventura’s Gold Coast facility became the county’s first recycling center last August, the city has been making money off the sale of the materials being processed at the center.
Despite its initial success, the center’s future remains far from secure, and officials predict that the windfall for the city may soon disappear.
Spelling trouble for the city and Gold Coast Recycling Co., its recycling partner, has been the unexpectedly low volume of trash delivered for recycling, officials said. In addition, competitors are emerging that could eventually put the Gold Coast center out of business. And a flood of recyclable material from Los Angeles County threatens to drive down the price of recycled aluminum, cardboard and paper.
A Jan. 28 City Council hearing has been set to reconsider terms of the city’s recycling contract.
Hailed by city officials as a model of forward thinking and good planning, the Colt Street center functions as a partnership between public and private interests that allows the city to profit from its recycling program without investing a penny in the center’s operation.
During the center’s first two months last summer, the city made almost $30,000 and Gold Coast’s revenues probably will increase in the short term because the value of recyclable materials is on the rise and neighboring cities plan to increase the tonnage they are taking to the center.
City officials are elated because, nationwide, most recycling programs cost cities thousands of dollars instead of making money for them.
And, for the time being, the recycling center is thriving and becoming more efficient, Assistant City Manager Steve Chase reported to the City Council last Monday.
Chase, who oversees city environmental programs, said the amount of trash left after recycling has been declining steadily, from 40% in August to 28% in November.
Chase predicted that as the rubbish hauler, E.J. Harrison & Sons Inc., becomes more familiar with the process of collecting recyclable materials--and the public more educated about what to put out--the percentage of residuals will continue to decrease.
In addition, the price of recyclable materials has exceeded the city’s projections by about $18 per ton, or 22%.
But hard times may lie ahead for the Gold Coast center and the city.
The price of recyclable materials is bound to take a dive once the big waste producers, such as the city of Los Angeles, step up their recycling programs to meet a state mandate to reduce waste by 25% by 1995, Chase said.
When Los Angeles began an aggressive glass recycling program last year, it became the largest provider of recyclable glass in the state almost overnight and prices plummeted, he said.
The same thing is likely to happen as large cities step up their paper, cardboard and aluminum recycling efforts to meet the state mandate, he said.
The program’s biggest disappointment, Chase told the council, is the volume of recyclable materials being delivered to the center.
While the city and the consortium that runs the center have made money off recycling, the rubbish hauler that brings in the materials is losing about $60,000 a month.
City officials said they are willing to sacrifice their profits to help cover the trash collector’s deficit, and a new contract is being negotiated.
Ventura city officials say that making a profit off recycling is a secondary consideration.
“When you go into a relationship and you’re making money right off the bat while the other partner is losing money to the point that it’s hurting its operations, that relationship needs to be reworked,” said the city’s recycling coordinator, Eric Werbalowsky.
In its agreement with the city, E.J. Harrison guaranteed that it would deliver 125 tons a day of recyclable materials from Ventura to Gold Coast, with no more than 30% left after recycling--or pay the difference.
But so far, the hauler has averaged about 70 tons a day from Ventura, and the shortfall has cost them more than $250,000, city statistics show. The Gold Coast center has the capacity to process more than 300 tons of recyclable materials a day.
“We took on a big job and we were a bit over-optimistic,” said Jim Harrison, one of three brothers who run E.J. Harrison and several other trash companies countywide. Jim Harrison also owns one-third interest in Gold Coast, along with two other local businessmen.
Harrison said his rubbish company has spent more than $200,000 for recycling barrels, pilot programs and equipment upgrading. The recycling program serves all the city’s 19,000 residences and more than 600 businesses.
Mayor Richard Francis was instrumental in ironing out the agreement with the rubbish hauler, making sure that Harrison--and not the city--would be liable for not producing enough tonnage.
“The important part of the contract was to get the job done without significant exposure to the city,” Francis said. “In the early drafts of the contract, the city was on the hook to deliver the tonnage.”
These days, however, Francis said he is willing to compromise. “If the tonnage goals agreed upon turn out to be unrealistic, then we need to be flexible,” he said.
Werbalowsky said city officials are renegotiating their contracts with E.J. Harrison and Gold Coast to reduce the trash hauler’s financial losses, perhaps by allowing tonnage from other cities to be included in Harrison’s quota.
Meanwhile, the city has renewed its efforts to attract recyclable materials from other cities in the county.
So far, the city is receiving about 50 tons of recyclable materials per day from Oxnard, Camarillo, Fillmore, Ojai and Thousand Oaks.
In the coming months, Chase estimated that the tonnage from outside Ventura could easily increase to more than 182 tons a day. And, by stepping up its own recycling program, Ventura could more than double its current tonnage, Chase said.
Even more threatening to the Gold Coast center’s future is that other cities and private firms in the county are exploring the possibility of opening their own centers.
Werbalowsky says that uncertainty and the threat of competition is a price that all pioneers must pay.
“Of course we’re concerned about other facilities coming on line that will duplicate our capabilities,” he said. “That’s the big question. But we’re running a successful operation here.”
The greatest danger to long-term survival comes from two giant trash conglomerates in the region--one in the public and the other in the private sector. Both have plans to move into the recycling business.
Waste Management of North America, the world’s largest waste management company, has applied for permits to open a large-scale recycling center in Oxnard with processing capabilities of more than 1,400 tons per day.
If approved by the county Waste Commission, Waste Management’s recycling center could open for business as early as 1993.
Company spokesman Jim Jevens insists that Waste Management “is committed to regional cooperation” and would only take in the leftover recyclable materials that Gold Coast doesn’t process.
Waste Management’s primary goal in the region is to build and operate a county landfill in Weldon Canyon, three miles north of the city of Ventura.
“The recycling component is a small part of our operation,” Jevens said, adding that his company would jeopardize its ability to work with the region’s cities if it began a cutthroat competition with Gold Coast.
“How much goodwill do you think we’d buy if we kick their butts and shut Gold Coast down?” Jevens said.
But not everyone is convinced that Waste Management will spare Gold Coast from an early death if allowed to operate in the county.
Bill Chiat, project manager of the Ventura Regional Sanitation District--a consortium of Ventura County cities that also plans to build a landfill and a giant recycling station--has a different view of Waste Management’s strategy:
“Waste Management has a history of buying small companies,” he said. “If their permits go through, they’ll do whatever they want with trash and recycling in the county.”
Chiat said the sanitation district’s proposed recycling center would offer Ventura and other cities in the region “an option” to decide where to take their recyclable materials. He did not rule out the possibility of having Gold Coast and the district work together.
“It is my understanding that the people who run Gold Coast were successful businessmen before they opened the recycling center, and I’m sure that regardless of what happens, they’ll do just fine,” Chiat said.
In addition to these two recycling center proposals, the city of Thousand Oaks is considering a recycling center to serve the eastern portion of the county, thereby avoiding the costs of transporting recyclable materials to Ventura.
So far, Gold Coast has made the only proposal to develop and run the Thousand Oaks center, said Peter Kolb, who oversees Thousand Oaks’ recycling efforts. Kolb said one of his main concerns is the prospect of competing recycling centers.
“There is no doubt that the number of proposed facilities outstrips the tonnage that can be collected,” Kolb said. “That means the local enforcement agency, the county Waste Commission, will have to decide which facilities survive.”
The Waste Commission--an advisory panel to the County Board of Supervisors made up of city representatives--is charged with overseeing the county’s regional waste reduction efforts.
Francis, who serves as Ventura’s representative on the commission, said he will lobby hard for the survival of Gold Coast because the center is a proven winner.
“They’ve done a good job and I’d like to see them stay,” he said.
Francis called the sanitation district’s proposed recycling center “a waste of taxpayer money” and said the Waste Management project was “very dangerous” because it placed the recycling business almost entirely in private hands.
“Unfortunately,” Francis said, “in this trash business, there is such a history of fear and jealousy among the cities that most decisions are not based on sound public policy--but rather on reactions to what other people are doing.”