College tuition and airline junk fees are not the only hikes we can feel coming! A drastic increase in disposal and recycling costs is on our doorsteps. Let’s discuss what is behind the dramatic increase in fees that will affect our California communities.
Several converging contributors are responsible for the upcoming increases. Large commercial generators should be able to offset a portion of the increase by diverting tip fees and tonnage on landfill-bound organics. However, residential and other small generators, like HOA communities, will bare the brunt of these increases and should budget for these rising costs over the next several years.
Three Reasons for the Cost Increase
1. New State Recycling Mandate
- AB 1826 is the California assembly bill, which went into effect in 2016. This mandate will continue to ramp up over the next 3-4 years. This requires that all organics be recycled as a separate waste stream.
- The AB 1826 will require a third route to be added to all excluding some rural jurisdictions, which may increase waste prices in California. However, the diversion of organics, which make up the largest portion of land filled waste, will require significant investments in facilities. These facilities are needed because they can process this stream.
- Additionally, a small portion of costs will be supplemented by capturing the energy produced by organic decomposition. Hopefully the creation of a usable end product in compost will help, but not nearly enough to offset the foreseeable expenses.
2. Rising Labor Costs
- California is raising the minimum wage to $15 an hour. While only a base of the workforce in the industry is working for minimum wage, the union negotiations, wage increases and an increase in minimums for salaried workers will significantly increase labor costs in a very labor-intensive industry.
3. Increased Fuel Surcharges
- While no drastic fuel increase is definite in the near future, prices over fuel in the next 3-5 years may increase for many reasons. Waste haulers are historically a first mover in passing any fuel increase to the customer.
- Even with many haulers in California, moving over to Compressed Natural Gas (CNG) trucks, fuel increases are typically based on the hauler’s national fuel prices. Additionally, CNG prices do tend to fluctuate with fuel, even if it’s not on the exact same trajectories.
Get Prepared: Create a Community Plan
Having a recycling plan in place to maximize your landfill diversion and help mitigate cost is essential to not only ensure community fiscal responsibility, but also to meet California compliance. Each community is unique and it is important to know the strengths and weaknesses of your current waste and recycling strategy as well as stay up-to-date on your local laws and compliance regulations for waste, recycling, electronics, and organics.
When creating your plan, remember that it is more than just a traditional waste or “trash” plan, but must also include a plan for bulbs, batteries, electronics, recycling, and organics. Do you have an environmental or compliance advocate on your HOA board or within your association?If the weight of planning falls on you, I recommend you look to your local government websites or visit California’s Department of Resources Recycling and Recovery (CalRecycle) at http://www.calrecycle.ca.gov to help you better understand the requirements for your community.
Seem a bit overwhelming? You can always reach out to industry experts to help consult and guide your planning to ensure you are not only compliant, but also prepared for the financial responsibility of these increased regulations. An environmental consultant can often offer professional assessments and will ensure that you are not only compliant, but also taking advantage of cost saving diversion programs. For a no-risk assessment of your community, please call Global Disposal at (858) 848-9278 or email me directly at [email protected].
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About Joshua Allen:
Winner of the 2016 Waste 360 40 Under 40 Award, Joshua R. Allen is a serial entrepreneur and Chief Executive Officer of Global Disposal. Josh is skilled at achieving operational efficiency, building successful teams, building greener communities and ensuring compliance implementation. Josh founded Global Disposal in 2008; PIN Waste in 2012; and purchased Universal Waste Disposal in 2015. All three companies were founded with the mission to create economic incentives to divert waste and increase recycling. Together, these three companies serve commercial, residential, and educational facilities in the areas of regulatory compliance, waste diversion, increased recycling and fiduciary responsibility.