By COLLIN GALLANT on September 18, 2019.
The company that picks up curbside recycling bins in Medicine Hat is being released from its contract, the city announced Tuesday, stating at the same time an alternate private provider could be in place in six weeks.
City utility officials told the News they are in discussion with other waste management companies after talks broke down with Environment360 over potential rate increases to cover costs in the challenging recycling resale market.
“We’re doing it in the best interest of the people who pay the rates,” said Lora Brenan, general manager of the environmental utilities department.
“We don’t want to see rates go so high that people get frustrated and give up on the program. It’s valuable and we’re committed to it.”
A city release Tuesday states the issue is challenges to sell recovered plastics in global markets.
Environmental360 argued it needed rates to increase in order to be profitable, the release states, and has signalled it will cease local operations.
Talks began about six months ago on a rate adjustment, she said. The contract provides base funding to perform the pickups, while the company also earns revenue off wholesaling the paper, tin and plastic collected from residences as well as material and glass from drop-off depots.
This year a number of municipalities, including Medicine Hat, have struggled to find buyers of plastic on the world market and in many cases have stockpiled material or disposed of some in regular landfills.
Brenan said E360’s handling of plastic is an issue because it bails all plastic together rather than separating out more valuable plastic types that are still marketable.
That firm will continue local pickups until late October, or early November, when the city expects another company will be ready to take up the service. The city says it is seeking an interim solution, and the program will continue.
“We want to assure all of our residents that the recycling program will continue with minimal to no interruptions,” added Brenan.
Company officials directed media inquiries to head office in Ontario, which did not return a message requesting comment.
The service was originally provided by Red Deer-based CanPak Environmental, though that company was acquired in late 2018 by E360. Since then the Ontario-based company has also signed contracts with Kelowna and four Ontario municipalities.
The city added the service in mid-2018 as a way to improve waste diversion in the effort to preserve space at the city’s landfill.
As part of the move, administrators promised to keep costs to ratepayers low via a private contract with a waste company that could use the high volume of material to better negotiate offloading contracts.
When the service was introduced, a new curbside recycling fee was added to residential utility bills, but with a reduction in the general solid waste fee the difference was about $3 per month, making it one of the cheapest in Western Canada.
As part of the deal, the city also sold the material sorting facility to CanPak and used the funds to purchase the blue bins that were distributed to about 26,000 addresses in Medicine Hat.
E360 will retain the facility, though the city does have first option to reacquire the property in Brier Park.
A new contract provider would likely truck volumes to its own out-of-town sorting facilities, then perform more diligent sorting there after only initial sorting here, said Brenan.
Municipal recycling volumes jumped by one third over the first year of operation, to about 3,100 tonnes, with administrators citing the more convenient pickup system as the reason.