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Funding woes could dissolve IRC

Agency no longer self-sustaining and reserves are running out as current deficit is $100,000

Mirror file photo by Patrick Waksmunski Employees for Burgmeier’s Hauling pick up trash and recycling in 2015. State law allows agencies like the Intermunicipal Relations Committee to abolish recycling programs if the programs create financial hardship, something the local agency is facing as the program no longer supports itself and funding reserves are running out.

Officials of the local agency that oversees state-mandated recycling in Blair County talked about dissolving the recycling program — the agency’s reason for existence — at their most recent meeting, because the program no longer supports itself and reserves are running out.

State law allows recycling agencies like the Intermunicipal Relations Committee, which operates curbside recycling and composting in four of the county’s most populous municipalities, to abolish the programs if they create “financial hardship.”

But even if the state accepts a financial hardship argument, it wouldn’t allow the IRC to jettison those obligations without repaying almost $1 million — the depreciated value of vehicles and equipment bought with state “development and implementation” grants over the agency’s 26 years, IRC Executive Director John Frederick said.

Such a payback wouldn’t be easy, because an attempt to sell off the IRC’s property and equipment would probably trigger “a public outcry” over ending the recycling program, said Frederick.

The state is unlikely to accept the financial hardship argument anyway, because the municipalities have never yet had to use general fund money to subsidize the program, and an average of just $25,000 a year from each municipality would cover the current $100,000 operational deficit, according to Frederick.

The municipalities may need to begin such a subsidy when the organization’s savings run out in the fall of 2018, Frederick has predicted.

The IRC’s financial problems have arisen from the shrinking grant funding from the state Department of Environmental Protection and from elimination of a surcharge on trash tipping fees levied by counties, due to a successful court challenge by the hauling industry, according to Frederick.

Commodity prices fall

The IRC is also losing income due to a precipitous drop in prices for recycling commodities, which shrank the incentive for haulers to collect the materials, reducing amounts collected and thus shrinking state grants based on recycling performance.

A couple of years ago, local transfer station operator Burgmeier’s Hauling could earn about $65 a ton by dumping recyclables at the recycling center in Pittsburgh, according to officials.

The Pittsburgh center paid the cost of transportation, Frederick said.

At some later point, the Pittsburgh center actually began charging Burgmeier’s for dumping the materials, even as it no longer covered the transportation costs, Frederick said.

“It was quite a turnaround,” he said.

There was a similar turnaround here.

A couple of years ago, local haulers paid $18.50 a ton to dump their recyclables at Burgmeier’s.

Now, they pay $50.

The recycling commodities market declined largely because of the low price of oil, which made it cheaper to manufacture virgin plastic than to recycle it, and the sale of steel from Asia at “rock bottom prices,” that made it uneconomical to recycle steel, Frederick said.

Rethinking mandate

The financial problems, the poor market and the loss of recycling enthusiasm have led committee members to talk about the possibility of persuading the General Assembly to eliminate the state mandate altogether.

“Pennsylvania needs to revisit the mandated thing,” said committee member Erik Cagle. “(It’s) not working.”

It’s unfair that the mandate applies only to the more populous municipalities, especially as they — through the IRC — provide services like recycling of hazardous waste and electronics to the non-mandated municipalities, adding to the financial burden, members said.

Those special services are accessed as heavily by the 45 percent of non-IRC residents as by those who live in the IRC municipalities, Frederick said.

“We’re footing the bill,” said IRC member Patrick Plummer, a Hollidaysburg councilman.

One possibility for generating income is a tipping fee on recyclables, but IRC solicitor Larry Clapper has cautioned it might be vulnerable to court challenge.

The IRC hopes to meet by teleconference with local lawmakers in late May to speak with them about the funding issues — including the possibility of eliminating the payback requirement — and maybe the recycling mandate altogether.

“To put their feet under the fire,” Plummer said.

Mirror Staff Writer William Kibler is at 949-7038.

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