On July 6, 2010, Toledo City Council passed legislation to address a past due bill and promised to create revenue for the City of Toledo. At the April 19 Toledo City Council meeting, questions were raised when the legislation was brought back before Council.

Ordinance 295-10 authorized Toledo to enter into a three-year Agreement with FCR Recycling for the processing of recycling materials and to address the balance owed to FCR at that time of $288,000.

During the July 6 meeting, then-Councilman Michael Ashford urged support of the ordinance as a temporary measure until Toledo and Lucas County were able to establish a Materials Recovery Facility (MRF).

“We still have almost a $300,000 debt hanging over our head and because it’s a fluctuating market, with this, finally we got to the point where this could be a payout; it could pay for itself within a year,” Ashford said.

Dave Welch, who was at that time director of public services, talked about the MRF but also provided details on the ordinance then before Council.

“The current piece of legislation in front of you will buy us some time,” Welch said. “It will also pay down our debt and also bring in some money into our coffers. It’s a good opportunity.”

The ordinance passed July 6, 2010, as an emergency measure, with Mayor Mike Bell signing it on July 8. According to a May 27, 2010 memo from Welch, “The City would realize a rebate of $20.50 per ton or approximately $30,000 based on 1,500 tons of recyclables in today’s market,” with the FCR contract.

At a Feb. 14 Public Utilities committee meeting, Councilman Mike Craig asked how close we were to making a profit on recyclables. He was told it was profitable at that time, that Toledo generates 20,000 tons a year in recycling. Using the cited rebate amount, that should generate $410,000 in recycling revenue.

On April 19, the ordinance came back to be amended, with it being stated that not only was the original ordinance flawed because it failed to authorize the expenditure of funds, but now the amount owed to FCR was more than $400,000. Additionally, FCR was sold and is now Resource Recovery Systems (RRS).

Councilman D. Michael Collins raised questions concerning Toledo’s decision to end trash collection.

“Do we really want to commit to a company for three more years, for a service that we’re not even going to be providing?” Collins asked.

Director of Public Services Ed Moore said, “We think it would be a good idea to enter into the contract and lock ourselves into the rates that we have right now.”

Deputy Mayor Tom Crothers asked Moore to provide details on the timing issue.

“If we pass this … we’ll be able to pay the lesser amount,” Moore said.

Councilman George Sarantou asked what the current bill was. Moore said it was more than $400,000. He said they negotiated that amount down to about $316,000 then negotiated it lower using recycling rebates since they are now experiencing a positive cash flow from recycling; $30,000 this month, which took the amount owed down to $288,000.

“This deal is on the table today, we’d like to move it forward,” Public Utilities Director Welch said.  “We’ve been holding these folks out negotiating back and forth.”

Welch said RRS was honoring the July contract, but could raise prices if Council did not act that night.

The ordinance was held at first reading at Collins’ request

It’s not clear how much Toledo has earned from recyclables given the variations in information. If Toledo was collecting 20,000 tons a year and was making a profit in February, why wasn’t enough revenue generated to pay RRS from the proceeds as intended in July?

Welch did not respond to an April 20 request for information.

Toledo will be out of the trash collection busiuness, but will still manage recycled material collected by Allied Waste. Allied, as the trash collector for Toledo through Lucas County Solid Waste Management District, would not benefit from the sale of recycling or be responsible for the cost should the recycling market drop.  Toledo would profit or pay.

Something doesn’t smell right.

Toledo Free Press Web Editor Lisa Renee Ward operates the political blog GlassCityJungle.com.

Tags: D. Michael Collins, George Sarantou, Glass City Jungle, Lisa Renee Ward, Mike Bell, Shredding the Curtain, Toledo City Council, Tom Crothers

This entry was posted on Saturday, April 23rd, 2011 at 1:13 pm and is filed under Glass City Jungle, Opinion, Shredding the Curtain.
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