NO to Privatizing Recycling in Chicago

From the Chicago Recycling Coalition  http://www.chicagorecycling.org/
Chicago’s Plan
for Privatizing RecyclingDeja Blue All Over Again (CRC responds to reports that the City of Chicago plans to privatize the blue cart recycling program.)

Over twenty years ago, U.S. cities large and small began implementing new municipal recycling programs, including two or even three-cart collections, which encouraged residents to separate their clean recyclable materials from general waste. The most successful municipalities worked hard to understand their residents’ needs and best match them with city-run programs.

Not in Chicago. In the early 1990’s, City government decided – with no public support – to outsource the processing of all its recyclables to the giant waste corporation Waste Management, which had proposed a mixed-waste “blue bag” program to the City. At the cost of millions of public dollars, huge sorting facilities were built for the waste corporation to use, where recyclables were supposed to be removed from raw garbage. The rest is history. The blue bag program failed, with single-digit recycling rates and low-quality materials.

It took the City until 2008 to admit there might be a better way, and it created a new City-run, source-separated recycling program. The program provided blue carts to over 200,000 residents, secured a favorable contract with a local sorting facility for its materials, and did its best to educate the public. Now, just three years later, and with only one-third of the program in place, the City is determined to give recycling back to private haulers. Didn’t it learn anything?

The City issued request-for-proposals in late 2010, but has provided almost no information regarding the process and the number of unanswered questions continues to grow. These are questions that should be answered before the City signs contracts and commits to yet another privatization scheme.

1) What are the real cost savings? Often the estimated cost savings from privatizing City services are primarily due to significantly lower wages and benefits for the workers, which raises serious concerns about the impact on workers and their families. In addition, cost savings estimates frequently make unsupported assumptions about greater productivity and fail to account for private firms’ overhead and profit.

2) What happens to the materials collected? The RFP appears to allow the vendor to keep the entire revenue from the sale of the collected materials. A revenue sharing approach may be more favorable – ensuring greater accountability and an opportunity to support local recycling industries.

3) What are the performance requirements? To ensure effective recycling rates, the contracts should include clear incentives to maximize participation and collection. For example, if the private vendors are paid by the household, rather than the number of collections made from blue carts, there is no incentive to increase participation. There should also be clear recycling goals and penalties if the vendors fail to meet those goals.

4) Who decides which firms get the contracts? When? How? While the bid tabulations have been posted, it is unclear whether the award selection has been made. Also unclear is what the basis for selection would be. The bids appear to be vastly different (bids for covering the entire city range from $1.2 million to $63.3 million), but information that could explain this is not publically available. There are also questions regarding the qualifications and track records of the private vendors. Brackbox, Inc, which submitted a bid and by one news account will be awarded a contract, is described by the Illinois EPA as a chronic violator of environmental regulations. This calls into question what exactly Chicago will get by outsourcing the recycling, a scenario that, given other recent outsourcing experiences, causes concern.

5) How will the City hold these private firms accountable to residents? If there are problems with recycling services, residents will turn to their aldermen, but responding to concerns will take time and energy. The cost of overseeing contracts and responding to residents’ concerns are rarely factored into privatization scenarios. In addition, there should be a clear reporting mechanism in order to provide citizens and advocates alike with timely and accurate information detailing the results of the program.

Chicago Recycling Coalition
Calls for Public Participation

While CRC is eager to expand the blue cart program, we have concerns about the rush to privatize. CRC recommends that the city NOT award a contract from this RFP and instead create a more inclusive process to develop a citywide expansion plan.