Roanoke’s city council approved the near-doubling of what it pays for single-stream recycling services to bolster the struggling company that provides them and keep the service going.
The council voted unanimously to increase the annual amount paid to Recycling and Disposal Solutions from $292,740 to $526,740.
The increase means the city is now subsidizing a program that was intended to essentially pay for itself, but that was before dramatic and sudden changes in the market for recyclable materials.
Under the program, residents can throw paper, plastic, glass and metal products into a single bin for recycling. Under the original contract with RDS, the company would process the material for $34.55 per ton, up to 700 tons per month — an amount the city has never reached. Sending the stuff to the landfill, by comparison, would cost $53.50 per ton.
But last year the Chinese market for recyclables suddenly threw companies like RDS into the red. RDS has been stockpiling recyclable material the company has contracted to receive, but is suddenly finding it very hard to sell.
Director of Public Works Bob Bengtson told the council two weeks ago that RDS’s business model is not sustainable in the current market conditions. The company said last year it was operating in the red.
City leaders hope increasing the payments to RDS will keep the company solvent until the recycling market improves.
The city’s contract with RDS is about to enter the last of a five year term, with up to five one-year renewals possible after that, should the company remain viable.