December 3, 2009
Loss of state payments forces closure of recycling facility
BARSTOW • The elimination of the handling and processing payments the state pays to recycling centers caused one Barstow facility to close and may make times hard for the others.
The local TOMRA Pacific Inc. recycling kiosk in the shopping center at the corner of East Main Street and Yucca Avenue closed its doors Sept. 25. Because of the dwindling value of aluminum, glass and plastic, and because of the loss in state payments, the Barstow facility was losing money, according to company officials.
Barstow’s Earthwize Recycling kiosk in the Stater Bros. shopping center on Armory Road will stay open at least until January, but according to company president John Griffin, the facility is also losing money. And even though it could still make money from the other material it collects, All Recycling Center may have to lay off two or three employees because of the loss in state payments for bottles and cans, according to Daniel Gonzalez, who owns the facility with his father Alfredo.
In July, the state cut 85 percent of payments used to reimburse local recycling centers for taking in bottles and cans because of a negative balance in the California Beverage Container Recycling Fund. Last month it eliminated the payments entirely. The fund is made up of unclaimed California Redemption Value deposits — the extra few cents people pay when they buy a soft drink, and are refunded when they recycle the container.
In January 2009, the state considered borrowing about $131 million from the fund, according to H.D. Palmer, a California Department of Finance spokesman. At that time the fund’s projected balance was $81 million. In May the fund was projected to have a balance of minus $162 million, Palmer said. The reason for the negative balance is that people are recycling more bottles and cans and are buying fewer soft drinks, he said. The governor is working with the California Department of Conservation, which oversees the recycling program, to develop a fix and will submit it to the legislature next year.
According to Chuck Riegle, vice president of public affairs for TOMRA North America, the reason for the negative balance in the recycling fund is because the state borrowed from it multiple times over several years. The date for repayment keeps getting postponed, he said. Earlier this month TOMRA and other recycling companies filed a lawsuit against the state over the eliminated payments.
“Our point is that the money is supposed to be returned if parties are suffering as a result of it,” Riegle said. “We’re sort of living proof that they’ve gone too far with this borrowing.”
Because of the lawsuit, Don Drysdale, Department of Conservation spokesman, couldn’t comment.
The Barstow TOMRA facility was one of about 40 other TOMRA kiosks that had to close, said Adrian White, president of TOMRA Pacific Inc. Statewide the company laid off about 67 people, he said.
Before any of the Earthwize facilities begin to close, Griffin said the company is waiting to see what the governor’s proposed fix is. For about a year, Griffin estimated that Earthwize was being paid 40 to 50 percent less for glass, plastic and aluminum than it had been getting in 2006 and 2007. State fees are what supports his company, Griffin said.
“It will be business as usual,” he said. “And we got our fingers crossed that one the state fixes this problem and two (material) values improve.”
Daniel Gonzalez said the elimination of handling and processing fees will have more of an effect on supermarket kiosks, and that he could still operate on the money he collects for scrap aluminum and steel. Alfredo Gonzalez said if the state doesn’t have money in the beverage recycling fund, it shouldn’t charge the CRV deposit fee.