The state is sitting on a $340 million surplus in recycling funds.
By Kevin Smith, LOS ANGELES DAILY NEWS
August 13, 2019
In a letter sent to Newsom on Thursday, Aug. 8, the Los Angeles-based organization said the recycling programs are falling apart, citing the recent collapse of rePlanet, which closed its remaining 284 redemption centers Aug. 5, and a shrinking number of options for customers to retrieve bottle and can deposits.
The watchdog group says consumers are only getting back about half of the $1.5 billion in bottle and can deposits they make, in part, because centers have become few and far between and lines at existing locations are long. Grocery and retail chains obligated to redeem bottles and cans in areas without redemption centers are failing to do so.
“CalRecycle has long known about these problems, but it has failed to act,” Consumer Watchdog President Jamie Court said in the letter.
The agency, he said, has failed to save the redemption centers and force the retailers to live up to their legal obligations.
In a statement issued Friday, CalRecycle said it conducts inspections at beverage dealers. From 2014 to 2019, those checks resulted in 1,314 violations to retailers for either not having required signage indicating in-store redemption or for not redeeming containers when they had agreed to do so. The violations resulted in nearly $100,000 in fines.
“CalRecycle has been highlighting these issues and doing everything allowable under current law to address these challenges for years,” the statement said. “CalRecycle continues to use its full regulatory authority to make short-term improvements to the program and continues to provide technical support to the Legislature on long-term fixes.”
California consumers receive 5 cents for most glass bottles, plastic bottles or aluminum cans that hold less than 24 ounces and 10 cents for containers of 24 ounces or more, according to the CalRecycle website.
Recycling center closures
rePlanet President and CEO David Lawrence linked the closure of his company’s centers and the resulting layoff of 750 employees to a variety of factors:
“With the continued reduction in state fees, the depressed pricing of recycled aluminum and PET (polyethylene terephthalate) plastic, the rise in operating costs resulting from minimum wage increases and required health and workers compensation insurance, the company has concluded that operation of these recycling centers and supporting operations is no longer sustainable,” Lawrence said in a recent email.
Not enough to cover operations
CalMatters, a nonprofit news outlet focused on California issues, said an internal state record shows rePlanet received state payments of nearly $25 million last year. Mark Murray, executive director of Californians Against Waste, said the payments weren’t enough to match the company’s operating costs.
“CalRecycle can’t do anything about it because the payments are tied to an outdated 1986 formula,” he said. “Under that formula, recycling centers are paid the same amount, whether they handle 40 million containers a month or 40,000.”
The state payments are intended to increase when commodity prices decline. But by the time that happens 18 months have passed and prices may have declined further, Murray said. As a result, more than 1,000 recycling centers have closed in California over the past four years.
Murray said the state is sitting on $340 million in surplus recycling funds that could be used to help redemption centers remain in operation. California needs to streamline the certification process, he said, and provide financial incentives for entrepreneurs who want to establish recycling centers.
Missing quarterly reports
Court said CalRecycle has failed to issue quarterly financial reports as required by the state Legislature.
The last report issued was for the period ending June 30, 2018, he said, and there have been no reports issued for the periods ending Sept. 30, 2018, Dec. 31, 2018, Mar. 31, 2019 and June 30, 2019.
CalRecycle did issue a report in April of this year, Court said, but that summarized information that was 10 months old.
The state agency acknowledged there have been delays in publishing the reports and chalked that up to the massive amount of data that must be collected and reviewed.
“By virtue of the size and complexity of this $1.3 billion fund, and the department’s responsibility to make sure the condition declarations and forecasts are sound, there is a considerable amount of data that must be retrieved and analyzed, which understandably takes time to perform,” the agency said in its statement.
That involves compiling a full data set from the California Department of Finance for review, conducting the necessary analysis and undergoing several levels of review through various government agencies.
“Historically, CalRecycle acknowledges there have been delays in publishing these reports,” the statement said. “The department has since made a commitment to better streamline the process, which has produced positive results.”
Consumer Watchdog said CalRecycling needs to report how much consumer deposit money it holds in state accounts and file timely quarterly reports as required under the law. The agency should also launch a public education and enforcement campaign to let consumers know they have an easy way to redeem their bottles and cans, the organization said.
In the long term, California’s recycling program should be revamped with a mandatory 90% recycling target, Court said, and financial and operational responsibilities should be moved to the beverage companies.
Kevin Smith handles business news and editing for the Southern California News Group, which includes 11 newspapers, websites and social media channels. He covers everything from employment, technology and housing to retail, corporate mergers and business-based apps. Kevin often writes stories that highlight the local impact of trends occurring nationwide. And the focus is always to shed light on why those issues matter to readers in Southern California.