With China halting import of most recycled materials, now is not the best time for a city to seek contracts for a new recycling vendor.
But that’s the position Janesville finds itself in. It began soliciting contract offers earlier this month and will close the application period Friday, April 26.
John’s Disposal in Whitewater has processed the city’s recycling for the past two years. The city considered extending the deal, but because the company requested “fairly dramatic” changes to its agreement, Janesville decided to open applications to others, Operations Director John Whitcomb said.
Whitcomb did not recall the specifics of some of those requests. He said they came in response to a changing landscape for the recycling market, one that has been transformed by China’s banishment of most imported recyclables.
In February, Whitcomb spoke to the city council and encouraged the public to be more careful when deciding which items to place in recycling bins. It would help Janesville’s recycling output be a more marketable commodity.
A higher quality recycling product is necessary in an oversupplied market tightened by China’s decision, he said.
Janesville’s current contract with John’s expires at the end of June. The contract is written to adjust to market conditions—in lucrative times, the city earns money for its reusable paper and plastic, Whitcomb said.
Now is not a lucrative time. Janesville has budgeted $40,000 in expenses this year for John’s to process its materials, he said.
Whitcomb expects John’s to submit a bid for another contract. He “gets a sense” that Badgerland Disposal, which is building a new facility in Milton, will also submit a bid. It’s possible another one or two companies also will apply.
Whoever Janesville chooses, Whitcomb expects the city will have to take on more risk through higher processing fees. Higher costs could be mitigated if the recycling market suddenly changes, he said.
The city would prefer the vendor have a station in Janesville to receive collected recyclables because that would reduce the city’s transportation costs. Right now, the city collects recyclables and hauls them to Whitewater.
If the vendor had a receiving center in Janesville, the company still could transport them elsewhere for processing. For example, Waste Management, which used to have the city’s recycling deal, once proposed to collect in Janesville but process the materials in Germantown, Whitcomb said.
The operations division will handle the contract itself, and the deal does not require council approval.
“Hopefully, markets over time improve. I am expecting some changes from the proposers than what we’ve seen in the past given the conditions and my discussions with others in the industry,” Whitcomb said. “China has disrupted the markets dramatically.”