Florida county's recycling program to operate at loss

Florida’s Miami-Dade County has renewed contracts with three companies to ensure continued waste collection and recycling services, but the county’s department of solid waste management's recycling program will operate at a $17 million loss over the next two years as a result.

The county recently approved contract extensions with Houston-based WM; Woodlands, Texas-based Waste Connections; and Coastal Waste & Recycling, Boca Raton, Florida, to handle its recycling and waste hauling.

Under the terms of the extended contracts, the Miami-Dade County Department of Solid Waste Management (DSWM) will spend an additional $44 million on recycling and collection during the next two years. The DSWM will spend $17 million with Coastal Waste and $10 million with Waste Connections for collection and hauling services. Another $17 million will go to WM for recycling services at its material recovery facility (MRF) in Pembroke Pines, Florida. This means the county will spend a total of $205 million under the contract, including $160 million it spent before this extension was approved.

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Those contracts, which were originally approved in 2008, were set to expire March 31 but now run through March 31, 2025. The county has put out a request for proposal (RFP) for new companies to manage its collection and processing. However, it is unclear when the county plans to have new companies selected and contracts signed.

“The extension of these contracts is a bridge needed to ensure the continuity of critical waste management services for the residents of Miami-Dade County while the replacement solicitations are evaluated, negotiated, awarded and transitioned, which is anticipated to go beyond the current contracts’ [2023] expiration date,” Miami-Dade County Mayor Daniella Levine Cava says in a signed letter to the county board of commissioners. 

Under the new contract, Miami-Dade will pay $143.99 per ton to WM’s MRF in Pembroke Pines and revisit the price annually. Three years ago, the cost per ton was about $50, Levine Cava notes in her letter. 

DSWM Director Michael J. Fernandez says when the county entered into the contract with WM, the terms called for the payment of a fixed rate per ton of $11.25 for 95 percent of the recyclables delivered to the processor. This rate has been adjusted up or down annually based on the U.S. Bureau of Labor Statistics’ Consumer Price Index. The current per-ton rate for 95 percent of the recyclables delivered is $14.41. Fernandez says the fixed-rate pricing structure was relatively low risk for the county because it was not subject to the fluctuating recyclable materials markets.

The department says it was able to negotiate a two-year extension under the same terms for collection but with an adjustment to the pricing. The contract extensions with Waste Connections and Coastal Waste include 28 percent price increases on collection costs in light of rising fuel, fleet maintenance and labor costs. 

“While the agreed-upon rate of $3 per household per month is higher than the current monthly per household rate, we believe these costs are fair and justifiable given current conditions in the recycling collection service industry,” Fernandez says. “Based on recent developments in the recycling industry, including China’s adoption of the National Sword Policy, the demand for recyclable materials has dwindled.” 

For the last several years, Fernandez says the recycling industry has trended toward increasing processing fees required to produce a cleaner stream of recyclables for domestic and international markets.

The county has been looking for companies to handle its recycling and processing since 2019 with the help of Kessler Consulting of Tampa, Florida. In 2022, the county submitted RFPs to replace its current service but had no luck.

The county reviewed the recycling industry market conditions and prepared an analysis of future recycling options, which included a recommendation the county begin collecting and processing recyclables on its own. 

Fernandez says the county has submitted grants to the U.S. Environmental Protection Agency’s Solid Waste Recycling Infrastructure grant program. The county’s grant application requests funding for preconstruction activities for a MRF. The scope of work includes working with one or more consultants to research and develop a list of siting options, a preliminary facility design, a final design and construction RFP and an RFP for facility operations.

“Given the significant challenges in the market for recycled goods and the increasing costs of fuel, labor and equipment, the administration is working on a long-term plan that will put the county on a path to achieve zero waste by 2050,” Levine Cava says in her letter to the commissioners. “The Zero Waste Strategy will emphasize waste reduction, composting and other waste management and diversion strategies that will reduce collection and processing costs in the long run.”