Hike reflects increased cost of finding markets for materials

By Dave Fidlin

Correspondent

The Village of Waterford will continue using John’s Disposal throughout the next five years as part of a recently approved plan. But it will result in a more than 8-percent recycling rate increase in the year ahead.

After hashing over the rationale for the rate hike, the Village Board on Sept. 9 approved the new contract with Whitewater-based John’s.

According to a memo from Nate Austin, municipal sales manager with John’s, the firm is offering the village a flat rate of $8.63 per unit between 2019 and 2020.

But the recycling fee is set to increase $1 per unit, from $3.49 in 2019 to $4.49 in the year ahead.

In the memo, Austin said the rates he was proposing were “based on our extensive history with the village, and the hopes of a continued partnership.”

Last year, John’s and other officials in the industry said they were feeling pinched financially from once-robust recycling revenues as China has curtailed its use of imported recycling materials. The financial situation in the past year reportedly has only grown more challenging.

In his discussion of the contract renewal with the board, Village Administrator Zeke Jackson said in the conversations he has had, he is of the understanding John’s has only been in the black from recycling paper and aluminum.

“Everything else costs them money,” Jackson said.

From his perspective, Jackson said he does not believe the financial situation for recyclables will improve.

“This is only going to get worse,” he added. “It’s happening throughout the entire developed world. I don’t see things going down (cost-wise). I only see things going up.”

During a broad-reaching discussion, several board members expressed pleasure and satisfaction with the service John’s has given in the past.

Jackson said the village could opt to handle garbage and recycling service on its own — a scenario that could eventually lead to cost savings — though there would be an upfront investment that likely would be sizable on the expense side of the ledger.

John’s rate increase is beyond the threshold of the consumer-price index (CPI), which presently stands at 2.9 percent within the Midwest region.

There is a clause within the contract that gives the village the authority to opt-out at any time if the rate increase exceeds the CPI.

In a memo of his own, Jackson said there are some other tools available to the village, though they will not necessarily soften the blow of the imminent rate increase.

“We receive $12,260 in state recycling grant monies,” Jackson wrote in the memo. “There is no known proposed increase in FY 2020 from the state to offset this additional expense.”

With the rate hike approved, plans call for increasing the recycling line item of the budget from $91,022 this year to about $98,531 in the 2020 operating plan.