Scott Swanson
Sweet Home Sanitation executives warned the City Council last week that a rate increase will be needed to cover what they described as rapidly rising costs for their company in dealing with recycling that cannot be shipped overseas.
Sweet Home Site Manager Scott Gagner told the council, during its regular meeting Tuesday, June 12, that monthly garbage rates could go up 12 to 15 percent.
Sweet Home is already due for an annual garbage rate increase in July, which the council agreed to last year. The rate increase is based on the Portland Consumer Price Index, which is currently 4.2 percent.
Gagner said trash collection costs have ballooned due to China’s ban on recycling materials it formerly accepted from U.S. companies, and it has created an “unbelievably difficult” situation for garbage haulers.
A year ago, Gagner wrote in a letter to the city that was presented to council members, Sweet Home Sanitation was paid approximately $30 per ton for mixed recycling. Following the China ban, exporters started charging more as material recovery facilities, where recycling is sorted and processed for shipment, slowed and they added personnel to improve quality.
He said that as of the end of May, his company was being charged “$84 per ton for the same material they paid us $30 per ton a year ago.”
With the costs of transportation and handling factored in, the costs per ton has risen 355 percent since 2017, he said.
They said Sweet Home Sanitation needs a revenue increase of 11.7 percent to cover the increased costs. If the state allows the company to deposit commingled recycling materials in a landfill, the cost increase would be 5.25 percent.
“We’ve been experiencing this since October of last year,” Gagner said. “That’s a six- or seven-month gap that we’ve already been absorbing without relief. We’re just looking for relief, moving forward.”
Councilors expressed empathy but said they were concerned about jacking up rates for residents who can’t afford it.
Council member James Goble asked what the possibility was of depositing recycling materials in the landfill.
Gagner responded that he doubted it would be “feasible” to get a permit to do so from the Department of Environmental Quality.
Aaron Donley, regional sales manager for Sweet Home Sanitation’s parent company, Waste Connections, said that the DEQ has tightened regulations regarding landfill use.
“Twenty years ago, we could probably do a landfill,” he said, but currently, “I don’t think the numbers would add up.”
He and Gagner noted that American consumers are in for a wake-up call, if they haven’t already experienced one.
China earlier this year started tightening its standards on what recycling it will accept. The issue, Gagner has told the council in the past, is contamination of recycled materials, and the Chinese government has put the kibosh on the level of contaminants it has accepted in the past from the United States.
“Mills in China right now are not recycling because the government has drawn such a hard line.”
Gagner said that line is .5 percent contamination of recycled items. Americans’ level of contamination is 30 to 40 percent, he said.
“.5 percent is undoable, unfortunately,” Gagner said.
“The truth is, we’ve been blissfully recycling when, in reality, it has probably been harming people in China.”
He and Donley noted that the problem is universal across the nation and that Oregon is actually one of the states in the forefront of addressing the issue.
“Every (city) council is going through the same situation across the state of Oregon,” Donnelly said. “We don’t envy you the decision, but this is something we feel, as the hauler, it’s our job to educate the public. This is something that’s happening around the world. It’s not a local issue. It’s a global issue.”
He said things could change, and that he hoped to “revisit this” in six months.
“We hope this is not permanent,” Donnelly said. “We could get a relief in prices or China could change its position.”
He hopes to see companies in America take on the challenge, he said, but predicted that is several years down the road and to establish a domestic firm in the Northwest would require about $1 billion.
Council members asked about various solutions.
Diane Gerson asked whether customers could have more options, such as less frequent trash pickup.
Councilor Bob Briana noted that there are “a lot” of retirees in the community, who don’t produce garbage in the quantity that younger households do.
“I don’t fill up my trash can, maybe every two weeks,” he said. “It’s never full. My recycling, maybe every three or four weeks. I’m in kind of the same position Diane is.”
Gagner said offering more customized trash pickup would be difficult, because pickup drivers’ routes would have to be changed weekly to accommodate different people’s needs.
“That’s why we went to offering different-sized cans,” he said. “We provide service every week so you don’t have trash smelling up your house or your garage.”
He said the company could look at different options, but weekly pickup is standard for most city dwellers, with collection every other week for customers in the county.
Mayor Greg Mahler said the problem “needs to be resolved sooner than later.”
“When a citizen says, ‘Sorry, I can’t afford it,’ it’s a problem,” he said. “You can already see it when you drive the back roads of Oregon. They’re recycling dumps. That’s only going to get worse and worse and worse. It’s going to spread around the state.
“I think we need to get off our butts and deal with this sooner or later.”
After discussion of requirements for commingled recycling and the need to educate the public, Gerson suggested that Sweet Home Sanitation provide weather-proof stickers with instructions that could be placed on top of recycling cans.
Gagner said he would look into that option.
Councilors were clearly reluctant to consider the possibility of raising rates.
Gagner and Donley cited figures demonstrating how cities in the Portland metropolitan area have raised rates in the 15 to 16 percent range. They also noted that Rogue Disposal in southern Oregon has taken the lead in dealing with recycling, working to educate its consumers and implementing a system that encouraged customers to play by the rules.
“Rogue started picking it up as landfill,” Gagner said. “Then they implemented new standards. They told customers, ‘If you don’t do it this way, you’re going to pay contamination fees.”
“Sixteen percent might be too much for Sweet Home,” council member Susan Coleman said, wondering whether an approach such as Rogue’s might be better for the community.
City Manager Ray Towry said it’s been difficult to find comparable cities to Sweet Home in this area.
Gagner noted that larger urban areas have economies of scale for garbage pickup that Sweet Home doesn’t.
“We’re not Beaverton,” responded Councilor Lisa Gourley. “We’re certainly not Springfield or Eugene. We need a base to work from. Portland has a different life than we have. It’s apples and oranges.”