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Seeking control: franchise rights to control generated material are shaping up as a recycling battleground. (Solid Waste Update).

With markets providing one set of challenges, some recyclers are also now seeing potential problems with the issue of franchise agreements. The concept of franchising has taken hold in many parts of the U.S. For local government entities, the possibility of establishing recycling and solid waste franchises can accomplish a host of things: improving the overall standard efficiencies, attaining and/or surpassing solid waste reduction goals or increasing recycling levels, perhaps even generating revenue. The final issue, some contend, is the main reason for the increased interest in franchising--for cash-strapped communities to increase revenue.

For those in the recycling and waste management industries, these concepts are a point of determination on how to successfully implement an effective program.

MANAGEMENT TECHNIQUE. For many municipalities, franchise agreements, whether exclusive or non-exclusive, provide some control over the waste and recycling stream.

For recyclers of traditional materials, the concept of franchise agreements is not as large a concern as it may be for companies involved in the construction and demolition industry. However, despite a fairly general acceptance that recyclables such as old corrugated containers (OCC), old newspapers (ONP) and aluminum cans are not included in most of the arrangements, there are cases where even this rule is not necessarily holding true.

In the state of Florida, despite the fact that traditional recyclables are not defined as part of the waste stream according to state of Florida laws, there are some concerns with the imposition of franchise arrangements in certain cities.

Tampa, Fla., was billing Visy Recycling, A Georgia-based paper recycling company, $50 per container per year to leave its containers at locations in the city. Although $50 per year may not seem like a significant cost, for larger recyclers with a considerable presence, the overall charges can add up.

According to Steve Levetan, a Norcross, Ga.-based consultant working with the recycling industry, one of the biggest points is that the recycling industry needs to differentiate itself from the solid waste stream. "We call it recovered material. Scrap is not solid waste."

While most cities use the exemptions for recyclables, Levetan notes that Tampa has tried to impose a franchise policy for recyclables. This, he notes, "is a sloppy approach." The inconsistency with Tampa pushing through a franchise concept for recyclables has been singled out as an abuse of existing state law, Levetan adds.

As to the possible franchising of recyclables in the Southeast, Levetan says that the concept of franchising should deal with waste, not recyclables. Therefore, he adds, cities should not be able to impose a charge on a company leaving containers for recyclables collection.

While for the most part cities have recognized the differences, Levetan points out that often he has had to go into a city, on behalf of a recycler and explain to local administrators that the legislation to prevent an incorrect charging of the recycling company.

Fortunately, there are still many local government entities that are looking to create a franchise arrangement that they hope will boost recycling, as well as improve the lot of many independent recyclers.

The city of Hawthorne, located in southern California, recently unveiled a solid waste and recycling program that aims to boost the recycling level by opening up the commercial sector from a franchise agreement to one of open competition for "clean recyclers."

Gary Liss, a consultant who has worked with the city in developing the program, says that the move by Hawthorne will maintain a franchise arrangement for solid waste hauling, as well as the handling of "dirty" recyclables. However, for clean recyclables, individual, independent recycling companies may solicit business from various businesses.

What is unique about the plan, Liss says, is that while many of the largest cities in California have an open competition for recyclables, many of the smaller cities in the state fall back on either exclusive or non-exclusive franchise agreements.

While putting the onus on generators to meet recycling goals, Liss stresses that independent recyclers in the Hawthorne area are encouraged "to go out and solicit business" from companies.

The city took the step to open up the recycling competition after the California Integrated Waste Management Board conducted a Biennial Review of the city's Source Reduction and Recycling Element and after public hearing, found several deficiencies.

It issued a compliance order that became final and effective in early 1999, including a schedule of compliance with actions that the city was mandated to implement. To reduce the amount of material going to landfills as much as possible, the city offers commercial businesses their choice of hauler. In order to provide city businesses with choice of solid waste hauler, Hawthorne is providing solid waste collection services for its commercial businesses through nonexclusive, citywide agreements.

In conjunction with the city's executing this agreement, the city code is being amended to establish a limited number of qualified haulers. By entering into this agreement, the city establishes performance standards, customers' rights and program enforcement flexibility. This agreement helps the city achieve the following goals:

* establishing performance standards, such as offering recycling services to all businesses serviced, to help assure that the city meets its obligations under law and protects and preserves the health and safety of its commercial businesses;

* enumerating and assuring customers' rights, such as the ability to discontinue service with an existing hauler and switch service providers;

* substituting the unexpired term of this agreement for the five-year period during which a solid waste service provider would have the right to provide handling services in the city, thereby giving the city greater flexibility in planning and implementing municipal solid waste management programs and compliance with diversion provisions of the Act; and

* providing the city greater flexibility, less costs and shorter time to enforce provisions, such as those relating to public health and safety, through contractual remedies (including liquidated and compensatory damages and specific performance of provisions of Applicable Law, including the city code) rather than city code enforcement.

In a nutshell, Liss stresses that the new franchise policy, rather than wedding residents and commercial entities to one or a handful of recycling companies, has allowed for greater competition from independent companies to come in and solicit for business.

While the program is only now being rolled out, he adds that Los Angeles County is looking at the possible success of the program as an indicator that other cities in the county could adopt similar approaches to handling the recycling and solid waste issues.

At the present time many of the state's larger cities have open competition for recyclables. However, there are some possibilities that smaller cities in other parts of the state and country, which traditionally have used franchise agreements for both solid waste and recyclables, could incorporate some of Hawthorne's policies.

THE CASE OF C&D. While most legislation using the concept of franchising exempt traditional recyclables, more of a battleground seems to be surfacing with those companies handling construction and demolition waste. And in this area, it appears that there is more of a battle brewing.

Many C&D recyclers claim that a growing component of their business is in the recycling of mixed C&D debris. However, often legislation does not stipulate that C&D is different from solid waste. Therefore, according to state law a company with an exclusive franchise has the right to take all the waste, including the construction and demolition waste.

This issue concerns many C&D companies who could end up paying significant costs to an outside vendor to move their material. Jason Fox, vice president of operations for Central Environmental Services, Orlando, Fla., says that according to Florida state law even though the collection containers are on his company's property, Central Environmental would have to pay the franchised waste hauler for every container it used at the site.

With Florida a major battleground between waste haulers and C&D companies, a new piece of legislation hopes to differentiate C&D debris separately from solid waste.

Tom Roberts, president of the Construction Materials Recycling Association (CMRA), says that a Florida Senate bill, SB 1462, has been introduced and aims to differentiate between the two streams. The bill, introduced by State Senator Al Lawson, aims to come up with a definition for C&D that would give handlers of this material some relief from the onus that franchises have on their company. According to the Senate Bill, "An act relating to resource recovery and management defining the term recovered construction and demolition materials for purposes of resource recovery and management; providing for certification of facilities that handle recovered construction and demolition materials; prohibiting local governments from adopting certain ordinances with respect to such facilities and materials; providing for a registration process; authorizing rules; requiring facilities at which recovered construction and demolition materials are handled to use scales meeting certain criteria; requiring such facilities to keep records of materials recycled or reused and of materials not recycled or reused; providing an effective date."

In short, the bill hopes to develop a new category, called "Recovered Construction and Demolition Materials." This category would apply to any materials which are capable of being feasibly recycled or beneficially reused.

Roberts says his group expects to have the bill heard by a senate subcommittee fairly soon.

Along with many C&D companies in the state, other groups in favor of the proposed senate bill include the Florida Recyclers Coalitions. Additionally, builders in the state have shown positive support and other environmental groups are in support of this legislation, according to Roberts.

Meanwhile, as more C&D companies seek to have their material reclassified as a recyclable material, the number of landfills and end sources for C&D waste continue to decline. According to Roberts, there were roughly 300 C&D landfills in 1994; in 1998 there were only 90 landfills capable of taking in construction waste.

While some supporter adding a new category in Florida, some groups oppose the definitions. Many local communities oppose removing C&D material from the waste stream. By exempting this material it could become more difficult to meet state-mandated recycling levels.

Secondly, past history has found that some "recyclers" sought to re-classify themselves to avoid more costly permits and licenses. However, some of these companies only processed for recycling a very small portion of the waste stream.

Another group that may not be the strong ally sought is the traditional recycling industry. This group, only now starting to escape from the mantle of waste handlers, is leery of being lumped back in with a material that is far less recycling oriented.

For the most part recyclers have been able to differentiate themselves from the solid waste stream. Many construction and demolition operators hope a similar exemption will allow them to operate outside the franchise policies.

No one contests that an increase in the recycling of C&D material would be welcome. However, some recyclers are concerned that legislation such as the Senate bill being introduced in Florida would unravel much of what traditional recyclers have accomplished.

A key concern is that while recyclers have worked very hard to differentiate recyclables from the waste stream, adding other materials to the "recycling" stream could sully the impression of recyclables as being a highly recycled (and recyclable) material.

Levetan says that if C&D material was classified the same as OCC, ferrous metal and various grades of paper could result in traditional recyclables being tarred by solid waste.

John Skinner, executive director of the Solid Waste Association of North America, says that there are several types of franchises, as well as other programs that various cities use. For franchise bidders, there are both exclusive and non-exclusive franchises. The advantages of the exclusive franchise, he notes, is that there is often an economies of scale benefit. "There are more efficiencies" with one company handling all the material.

The franchise issue, however, is primarily dealing with solid waste, rather than recyclables and solid waste. For opponents of franchising, concern always flows toward the assurance that recyclables are not considered part of the solid waste stream.

The advantage of franchises, whether exclusive or non-exclusive, is that the local governing authority is able to set minimum standards and environmental service requirements, Skinner adds.

And, since many recyclers focus most of their energies with collecting and processing recyclables from outside the residential sector, most franchise policies do not include them. Skinner says that the commercial stream is more toward the open market, which allows for competitive processes between various recycling companies.

There is a lack of clarity over whether franchise policies could have a negative (or positive) impact on the recycling industry.

While some opponents feel that the issuance of exclusive franchise agreements incorporates many of the most problematic aspects of flow control into the handling, transporting and collection of recyclables, most feel that in its present state, franchise agreements will have a minimal impact on the traditional recycling industry.

But for some recyclers, sorting through the current maze of arrangements and paying fees not figured into their operatings costs is proving troublesome.

WASTE EXPO TRASHES NEW ORLEANS

WasteExpo 2003 will be held at the Ernest N. Morial Convention Center in New Orleans from June 3-5.

According to the WasteExpo Web site, www.wasteexposhow.com, the convention is the largest tradeshow in North America serving the $43 billion solid waste and recycling industry.

"Our mission is to organize an event that serves the waste and recycling industries--private sector, public sector and waste management processionals from all industries, companies large and small, from the United States and abroad," the Web site reads.

Educational sessions will begin Monday, June 2, with the exhibit hall opening June 3. WasteExpo will feature several new educational seminars that include interactive learning opportunities, employee training workshops and business management techniques.

An educational track titled "Recycling in Today's Market" will focus on issues unique to the recycling industry. It will cover topics such as collection, processing and disposal trends in e-waste; processing recyclables to retain quality and increase quantity; and balancing costs and revenues for variable rate programs.

Other educational tracks will address hauler-related issues, safety, general industry topics, landfill practices, employee/employer relationships, equipment and legal issues.

The exhibit space, which will feature more than 430 companies, will be organized into three product concentration areas: collection and transfer, landfill management and recycling/processing/composting. Special pavilions will also be designated for truck components and supplies as well as technology.

In addition to the educational sessions and exhibits, WasteExpo 2003 will also feature numerous special events. The annual invitational golf tournament, organized by the Environmental Industry Associations (EIA), will be Monday, June 2, at Timberlane Country Club. The golf package registration includes carts and green fees, food and beverages, driving range and transportation. Those interested in registration information should visit www.envasns.org.

The Mardi Gras-themed welcome reception will also take place June 2 in the Grand Ballroom of the Hilton Riverside. According to WasteExpo, the event will prove a valuable networking opportunity.

The EIA will host its Inspirational & Awards Breakfast beginning at 7 a.m. June 3 at the convention center. Author Roger Crawford will provide the inspirational speech, which will address living life with humor and a positive attitude despite his physical handicap.

Primedia Business Exhibitions, Stamford, Conn., produces WasteExpo. Those interested in more information or in registering can visit www.wasteexposhow.com or phone 800-927-5007.

FRANCHISING RAISING HACKLES

Demolition contractors and their subcontractors who recycle materials are having increasing problems dealing with municipal franchising laws, especially in South Florida. The issue was one of several facing construction and demolition (C&D) materials recyclers cited at a session that took place during the National Association of Demolition Contractors (NADC) in Orlando, Fla., in early April.

NADC guest speaker Timothy Townsend, a researcher at the University of Florida who has worked on several projects focusing on C&D materials recycling, noted that "exclusive franchise agreements" have hampered C&D recycling efforts in Florida, and attendees were quick to agree.

Some demolition contractors and recyclers attending said they are facing container placement fees in the $50 range in Orlando, Fort Myers and other Florida cities.

Townsend noted that one Florida legislator introduced Senate Bill 1462 last year, which would have defined recovered C&D materials as a separate product category exempt from solid waste franchising regulations. But he remarked that efforts to pass the bill have stalled and it does not seem likely to move forward any time soon.

Rigid franchising agreements have been seen in other parts of the country as well, including California and Washington State.

Other issues facing C&D recyclers include coping with the presence of lead-based paint (LBP) and lumber treated with chromium copper arsenate (CCA) in the recycling stream. Regulators and health officials are carefully monitoring the handling of lead in any form, including as paint in the C&D concrete and wood stream. Concerns about toxic levels of arsenic found in CCA-treated wood are more recent.

Concrete recyclers are maintaining that LBP within the concrete stream is found in such small amounts as to be negligible in any given load of crushed concrete. "It would be very difficult for concrete to be considered a hazard because of a coat of lead-based paint," said Townsend.

Recyclers of scrap wood, however, will have to remain vigilant in how they handle older painted wood as well as decking, stairs and other pieces of lumber that were treated with CCA. He noted that wood fuel users have their emissions monitored for lead and arsenic, so material will have to meet set standards of non-contamination. There are also concerns in the mulch market that CCA-treated wood be kept out of that stream, since mulch is handled by bare hands and used as playground cover.

The NADC Annual Convention took place at the Renaissance Orlando resort March 30 to April 2.

The author is senior editor and Internet editor of Recycling Today. He can be contacted at dsandoval@RecyclingToday.com.
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Comment:Seeking control: franchise rights to control generated material are shaping up as a recycling battleground. (Solid Waste Update).
Author:Sandoval, Dan
Publication:Recycling Today
Geographic Code:1USA
Date:May 1, 2003
Words:2993
Previous Article:Sifting through: knowing the products to be marketed can help C&D recyclers make screening choices. (Sorting & Separating Equipment Focus).
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