It was the perfect storm of problems: Recycling values for aluminum, plastic, and glass had bottomed out. People were cashing in on single-use plastic water bottles more than ever before. The state had announced it would slash funding.
After 46 years in operation, the Larrabee Recycling Center could no longer afford to stay in business. At the end of 2016, it shut its doors—following in the footsteps of hundreds of recycling centers across California. The closure left Santa Maria with three California Refund Value (CRV) buyback centers.
The Larrabee center averaged more than 200 customers each day, according to co-owner Shannon Larrabee. During its last week in business, daily foot traffic reached 386 customers.
“That last week was brutal, saying goodbye,” Larrabee told the Sun. “If you saw some of our customers, we had some of Santa Maria’s poorest people coming in. They really depended on that money, and it was heartbreaking for us to say we’re closing to them.”
She added that it was “terrible” to say goodbye to the center’s regular customers—people who come in weekly, or even daily.
“I’m really frustrated with the state of California,” she said. “They have this program in place and it’s not doing what it’s supposed to do.”
That program is the Beverage Container Recycling Program, through which consumers pay a CRV fee when they buy certain recyclable materials, but should be able to redeem that fee at a buyback center.
CalRecycle, the state department in charge of the recycling program, helps subsidize the cost to recycling centers for disposing of materials. The amount subsidized by the state changes periodically based on a formula, and at a Dec. 1, 2016 meeting, CalRecycle told recycling centers to brace for that subsidy to drop in 2017 because the CRV fund was “under stress.”
On top of that, commodity buyback values had hit rock bottom. Aluminum, once Larrabee’s “biggest moneymaker,” was selling cheap. Glass had become more expensive to recycle than to bury in a landfill, to the point where the Larrabee center owed about $500 for every 20,000 pounds of glass they processed. Plummeting oil prices had driven down the cost for producing plastic, therefore lowering its scrap value as well—meanwhile, Larrabee said, customers were bringing in single-use plastic bottles in huge volumes.
And as surrounding recycling centers struggled and closed, customer traffic headed to Larrabee’s, which faced the costs of new staff hires, increasing machine maintenance needs, and the purchase of a plastic crusher.
So when CalRecycle announced a projected decline in funding, it was the last straw.
“That’s when we made our decision to close our business at the end of the year,” Larrabee said. “And now people are left with two centers operated by rePlanet that have one staff person, one scale. They can’t handle larger loads. They close down for an hour and a half each day during lunch.”
“It really leaves folks in Santa Maria with not a lot of good options,” she added.
Hugh Bedford, co-owner of Bedford Enterprises, said he’s noticed an uptick in customer volume at the company’s Santa Maria-area recycling terminal since Larrabee’s closed—but for now, it’s not putting too much pressure on his business.
“At times [customers] come right in and get right out,” Bedford told the Sun. “At other times I look out and there are a few cars or pickups [lined up]. But I don’t think people have really had a problem with it.”
He said that Bedford Enterprises is in a different situation from Larrabee’s because Bedford also deals with scrap metal and solid waste, meaning they can shoulder the burden of processing low-value CRV containers.
“As long as it doesn’t add too much congestion to what we already do, then we’ll keep doing it,” he said.
But if their business relied solely on CRV buyback, that would be a different story.
“It’s not the greatest,” Bedford said. “The state needs to pay some more money. But we can offer a service right now without really being hindered. If we were to live off of that, no, it wouldn’t work.”
For the time being, though, Bedford will keep trying to accommodate the business’ customers and “keep them recycling.”
“That’s what it’s all about,” he said. “That’s what we want: for people to keep on track and pick up those bottles.”
Larrabee pointed out that without recycling centers, CRV stops acting as a deposit and instead becomes a tax. She said it didn’t make sense that the CRV fund was “under stress,” because it’s supposed to be prepaid by the consumer.
Mark Oldfield, communications director for CalRecycle, acknowledged that dipping commodity values and government subsidies have “put the squeeze on recycling centers,” especially the low-volume ones.
“We totally understand that if [the subsidy] goes down, it’s going to have a negative effect on these businesses,” Oldfield told the Sun. “But again, we’re locked in this formula. We’ve been doing it this way for 30 years.”
According to Oldfield, California currently has about 1,700 recycling centers open. At its peak, there were about 2,200.
But he said Gov. Jerry Brown’s proposed budget for the 2017-18 fiscal year includes potential reform for the Beverage Container Recycling Program.
“We’re looking at restructuring the payments that go to the various recycling centers to help those that need the help most to give them a bigger boost in terms of the subsidy they receive,” Oldfield said, adding that low-volume recycling centers tend to face a higher cost for recycling. “How do we adjust for that to help make up the difference and help them remain viable from a business standpoint?”
Brown’s administration aims to eventually divert 75 percent of the state’s waste from landfills—a tough goal when current commodity values make it more expensive to recycle some materials than to bury them in the ground. The recent budget proposal touches on this.
“Increases in the recycling rate have resulted in a structural deficit in the Beverage Container Recycling Fund,” the budget summary states. “In addition, the program does not respond quickly to fluctuations in the marketplace. The program must be both nimble and fiscally sustainable.”
The summary adds that the consumer shouldn’t shoulder most of the financial burden to sustain the recycling program, and that future investments in the program should focus on ensuring products are recycled into new commodities whenever possible.
“The administration is committed to collaborating with stakeholders on a comprehensive reform package,” the summary states.
But until that reform package comes to fruition, recycling centers remain strained. As centers continue to close, those still in operation receive more traffic and become financially responsible for recycling more materials—a costly burden for struggling businesses to bear.
Without CRV buyback centers, people might end up dumping their recyclables in the recycling bins managed by their cities, Larrabee said.
“Cities are going to have to look at their waste management plans and decide if they want to facilitate and accommodate recycling so people can get their CRV back, or are they happy with everything just going in the blue bucket,” she said.
When recycling goes “in the blue bucket,” the money cycles through Health Sanitation Service and ultimately pours back into the municipalities, she said.
“You can see there’s kind of an incentive not to have recycling centers, unless they are really concerned about reducing waste management,” Larrabee said.
Santa Maria Public Information Officer Mark van de Kamp said the city won’t react to any particular individual recycling center closure, but it does encourage recycling. He added that the reduced buyback values have made the city’s recycling program more costly as well.
“We have no plans to stop the city’s recycling programs, and those have been expanded in recent years,” van de Kamp told the Sun. “I don’t want to say we’re in the exact same situation, but the city’s costs to get those materials recycled also increases. But we believe in recycling, and we would continue that.”
As for Larrabee, she said the most daunting possibility is that recyclable items could end up in landfills just because recycling isn’t profitable enough.
“It’s just sickening to throw a renewable resource in a landfill,” she said. “Ultimately, it’s the customer and the environment who pays.”
Staff Writer Brenna Swanston can be reached at bswanston@santamariasun.com.
This article appears in Feb 2-9, 2017.
