Allied approach

Joe La Mariana relies on relationships to keep materials moving and operations growing at South Bayside Waste Management Authority (SBWMA), which is more commonly known as RethinkWaste. The agency formed in 1982 with a goal of providing cost-effective waste reduction, recycling and solid waste programs to serve its member agencies in San Mateo County.

“From my understanding, [the agency] was formed at a property that was originally an old laundry facility that they converted into a transfer station and ultimately [to] a material recovery facility (MRF) in two large buildings on-site,” says La Mariana, executive director at RethinkWaste.

That site is known as the Shoreway Environmental Center, San Carlos, California. The center features a 70,200-square-foot MRF that handles commingled material and a 75,000-square-foot building that houses its transfer station. The site also features a public recycling center and an education center.

Today, the joint powers authority serves 12 member agencies in San Mateo County. It also partners with two large contractors—South Bay Recycling (SBR) and San Francisco-based Recology—that help manage the MRF and hauling, respectively.

“Both of them have very deep experience with their staff and with the solid waste collection and transportation that we need to get the job done; the agency doesn’t have to take that on,” La Mariana says. “In some municipalities, services like these are provided through city workers. That’s fine, but for our jurisdiction, we decided to partner with experts on the private side of that.”

“It’s absolutely a priority to maintain relationships. There’s no question about that.” – Joe La Mariana, executive director, RethinkWaste

Dwight Herring, general manager at SBR, San Carlos, adds that the partnership with RethinkWaste has been very collaborative since SBR became a contractor to the agency in 2011.

“We enjoy a great working relationship,” he says. “I typically meet with Hilary Gans, senior facilities and contracts manager [at RethinkWaste], in person once a week and have discussions multiple times a month. We share ideas on additional recovery of high-value commodities, improving material quality, opportunities to increase diversion, improving operational efficiencies and much more. It’s a very collaborative process, and we’re in lockstep in seeking out ways to improve operations and the environment.”

Because of its contract with SBR, RethinkWaste is able to move materials through Potential Industries, a vertically integrated recycling company and broker based in Los Angeles. Potential Industries, a 40 percent owner of SBR, is a large exporter of recovered fiber off the West Coast.

Regarding Potential Industries, La Mariana says, “They have a loud voice in the marketplace.”

He adds that the partnership with Potential Industries has been especially helpful since National Sword went into effect in China March 1, 2018.

“A lot of MRFs out there have to store materials because they don’t have a home for it. We’ve not had that situation here,” Herring adds. “We’ve been able to move material on a consistent basis. When the deal with China came down, [Potential Industries was] able to basically shift our materials to other mills in Southeast Asia. I am in contact with Potential daily. So, as things came up, we were able to communicate with SBWMA for about a year before China shut its doors. We basically let SBWMA know this is coming, and we need to prepare for it.”

Although RethinkWaste has been affected by declining pricing for commodities, the agency hasn’t had to resort to landfilling its recyclables. Through these partnerships, RethinkWaste has managed to find homes for commodities in other markets, such as Taiwan, South Korea, Vietnam, Malaysia and India. La Mariana attributes this success to the agency’s strong relationships.

“So much of our business is about relationships,” he says. “And when there is a crisis, those personal relationships become even more important. If someone is in a crisis mode, they’ll want to do business with someone they’ve worked with over the years versus someone new who dropped into their lap and is an unknown, unproven commodity.”

Photos by Mark Madeo Photography

Investing in fiber lines

The SBR MRF receives about 80,000 tons of material annually. About 53 percent of the material it recovers and prepares for market is fiber, while glass, metal and plastic containers comprise 25 percent of the materials it recovers. The MRF has a 16 percent residue rate. Because of shipping and logistics issues, the MRF generally inventories 6 percent of the material it prepares for market.

Glass, metals and plastics are sold domestically, remaining unaffected by global market changes. However, the same can’t be said of the recovered fiber at SBR’s MRF.

As of February 2019, Herring says pricing for cardboard was about $78 per ton and pricing for mixed paper was $1 per ton FOB (freight on board) the seller’s dock in San Carlos. “It’s such a volatile market for paper,” Herring adds.

La Mariana says the decline in revenue from recovered fiber sales has caused a $5 million hit to RethinkWaste’s budget, with a net effect of about $4 million. He says those costs could trickle down to ratepayers in the next couple of years if not addressed.

To combat the estimated $4 million setback, RethinkWaste has plans to invest an additional $15 million in upgrading its equipment at the San Carlos MRF in a two-phase project. The new equipment will be geared toward improving fiber quality. Currently, the MRF features optical sorters on its container lines. RethinkWaste plans to add similar optical sorting technology to its fiber lines.

“That technology has now been refined and can make distinctions between different grades of paper,” La Mariana says. “The first part of these upgrades is adding optical sorters for fiber products.”

Gans says it’s been about 10 years since the MRF was built. He notes that sorting technology has advanced significantly in that time.

“The major reason for the upgrade is to make better quality recyclables so we can continue to sell into the commodity markets,” Gans says. “That’s obviously been a hot issue in the industry—everyone’s trying to figure this out. We’re applying some technology to sort more material more effectively, more cheaply.”

While the investment is costly, it will help to lower operating costs at the MRF in the long run.

RethinkWaste plans to approve the upgrade at a board meeting in the spring, with plans to have the technology upgrades installed 12 months after the approval. The money to fund the project will come from RethinkWaste’s capital reserves. La Mariana adds that the agency has received strong support for this upgrade from its board.

“We’re trying to recover high-value fibers out of mixed paper and get the mixed paper contamination levels low enough that it qualifies as high-grade paper instead of mixed paper,” Herring says.

La Mariana adds that the upgrades make “good business sense” as they will help the agency to sell higher grades of recovered fiber to the market.

“[This] is a very significant investment to modify the equipment in response to market conditions,” he says. “But we feel the urgency of this. Every day that goes by is a missed opportunity. We have no illusions of the China market coming back at this point. We’ve moved on. So, what our main goal to do is to keep our material of a significantly high enough quality that keeps us at the front of the line in the global commodity market and try to yield the best revenue available.”

Staying engaged

In recent years, RethinkWaste also invested in improving safety at its MRF as a result of fires caused by lithium-ion batteries. “It’s a big issue,” Gans says. “These fires are probably the scariest thing that recycling facilities contend with.”

The San Carlos MRF experienced an especially large fire in September 2016 caused by a lithium-ion battery. That event caused the MRF to shut down for about four months, and it prompted the agency to spend the last two years working to protect the facility against fires. Because of their experience, La Mariana and Gans also have had opportunities to speak publicly about the need for legislation to prevent these fires.

RethinkWaste’s employees and its partners’ employees are fairly active on the legislative front. La Mariana stresses the importance of taking a proactive stance in lobbying for legislative changes that will help the recycling industry overall.

“It’s critically important that our member agencies see us and see our faces out in the communities that we serve,” he says. “When it comes to legislative and regulatory issues, I’ve made it a priority for us to be engaged at the state level.”

La Mariana also makes sure the agency is represented in many industry associations. He is actively involved in the Solid Waste Association of North America’s (SWANA) Northern California Gold Rush Chapter, Californians Against Waste, the Northern California Recycling Association, the California Product Stewardship Council and the California State Association of Counties.

While being involved in all these groups is time-consuming, La Mariana says he makes sure he finds time for them. He adds that the relationships formed by participating in these associations ultimately benefit RethinkWaste.

“The associations create a network and an alliance of people who are experienced and highly skilled in their fields,” he explains. “If you ever have something unusual going on, you can pick up the phone and call your counterpart at this agency or at that company and have a meaningful discussion on ‘How are you guys handling this China situation?’ And we all learn and grow from those relationships—it’s absolutely a priority to maintain relationships. There’s no question about that.”

The author is managing editor of Recycling Today and can be contacted at msmalley@gie.net.