Nearby communities might have to pay Lexington more for recycling

Cities and counties surrounding Lexington might have to pay more to use Lexington’s recycling center after July 1.

A committee of the Urban County Council voted 9-0 Tuesday to increase the amount it charges 16 affiliates, including neighboring counties, cities, the University of Kentucky and private companies, from $35 a ton to $50 a ton. Raising the fees is likely to generate an additional $220,000 a year for the money-losing recycling operation, city officials said Tuesday during the council’s Environmental Quality and Public Works Committee.

The fee increase proposal will now go to the full council. It will be several weeks before a final vote is taken.

The city has not increased the amount it charges its affiliates since 1992, when the city’s recycling center opened.

The city’s material recovery center on Thompson Road operated at a loss of $707,684 for the fiscal year that ended June 30, 2015. According to data provided by the city, sales from those recycled materials have declined by 38 percent from 2007 to 2015. Moreover, operation costs have increased by as much as 48 percent during that same period, city officials told the Environmental Quality and Public Works Committee during a February meeting.

The city’s recycling center has been losing money over the past several years as the revenues it generates from sales of recycled materials has declined. Yet the cost of operations of the single-stream recycling center has increased. To stop the losses, the city has explored increasing fees, privatizing recycling and changing the mix of recycled materials it then markets.

Because commodity market prices are currently so low for recycled materials, it’s unlikely that any private company would take over the operations, Tracey Thurman, director of the Division of Waste Management, said in a letter included in Tuesday’s presentation.

Increasing the commodity prices should help the city cover some of its losses, Thurman said. If the full council approves the fee increase, the memorandums of understanding between Lexington and the affiliates will have to be rewritten. Thurman said waste management hopes to have the increase in place shortly after July 1, the beginning of the fiscal year.

Lexington sells and markets the usable recycled goods. It shares the revenues from those sales with the 16 affiliates. That means some of those 16 affiliates get a check from Lexington, depending on how much of the material the affiliate sends to the recycling center can be sold.

Yet, Lexington is losing money because it also pays operational expenses.

Thurman said officials have spoken with many of the affiliates, and there has been no “major push-back.”

Among the 16 affiliates that send recycling to Lexington are Madison, Franklin and Anderson counties.

Madison County Judge-Executive Reagan Taylor said he wasn’t aware that Lexington was considering the fee hike but that Madison County’s solid waste director had mentioned the possibility in the past. The amount of money Fayette County sends back to Madison County after the recycled materials have sold has dramatically decreased even in the past year, Taylor said.

“That’s a pretty steep increase,” Taylor said. “I think it’s a great service to the community. But if the rates are going to go up, we may have to explore other alternatives.”

Currently, Lexington can recycle only plastic jugs and bottles. It is not recycling or reselling other plastics, but it is exploring how much money it can make on other plastic recyclables. The city accepts all plastics and then sorts them out in a process commonly called single-stream recycling.

Many cities went to single-stream recycling years ago to encourage more people to recycle. But it costs more to operate because those things that can’t be sold have to be separated and sent to the landfill.

This story was originally published April 19, 2016 at 4:35 PM with the headline "Nearby communities might have to pay Lexington more for recycling."