Competition for Twin Cities' recycling contracts sparks discussion of workers' rights, environmental goals

Recycling contracts, at least in Minneapolis and St. Paul, are about more than what people toss in the bin.

Local nonprofit Eureka Recycling is competing with Waste Management, the nation's largest garbage company, to win five-year contracts from the state's two largest cities, and environmental groups are lobbying city officials to factor workers' rights and waste reduction goals into their decisions.

At stake are more than 46,000 tons of recyclables produced annually by Minneapolis and St. Paul, which processors sort through giant machines and sell to companies locally and across the globe. The impending decisions in both cities on who will process all that plastic, glass, paper and metal have spurred e-mails to City Hall urging Minneapolis leaders to choose Eureka.

The firm's supporters highlight its use of well-paid full-time sorting employees — rather than temporary labor common at other plants — low rate of material left unrecycled and commitment to reusing materials for new products locally. They see a big contrast between Eureka and Waste Management, a for-profit company based in Texas that operates more landfills than recycling facilities across North America.

"Not every contract sees this level of advocacy," said Council Member Elizabeth Glidden, who sits on the committee that will review the proposals Tuesday.

Glidden noted that most issues highlighted by constituents extended beyond the scope of the city's request for proposals from the recycling companies, which focused more on cost of service. "I think they just kind of go to our heightened awareness today of thinking about companies in a more holistic way," she said.

But staff have recommended the city switch from Waste Management, its provider since 2012, to Eureka based largely on the companies' financial proposals. St. Paul has not made a recommendation.

Julie Ketchum, a spokeswoman for Waste Management, declined to comment, saying the bidding process prevents the company from answering questions.

The campaign for Eureka points out that the company's employment benefits, from a living wage to paid sick time, align with a hot topic in local politics. Both Minneapolis and St. Paul are mulling whether to require private business to offer paid sick leave.

The two firms have dueled for contracts before. When Plymouth decided to switch from Waste Management to Eureka in 2008, Waste Management persuaded residents to call city officials in droves over slightly higher fees. The city backed down and extended a contract with Waste Management.

The two companies have also vied for Minneapolis' contract in the past.

"This is definitely one of our most significant contracts and financial outlays," said Council Member Kevin Reich, chairman of the city's Transportation and Public Works Committee. "And not only does it have that size, but … it's a very visible public service and it touches a lot of different goals."

Lynn Hoffman, Eureka's community engagement chief, said the "stars seem to be aligning" between Eureka's goals and politics at City Hall. Mayor Betsy Hodges made "Zero Waste" a benchmark of her 2013 campaign, and last year announced plans to ensure "everyone who lives and works in Minneapolis recycle more and throw away less."

"Part of the reason we were so excited to bid this time around was really because there's new leadership in the city," Hoffman said.

In addition to St. Paul, Eureka also processes recycling for Roseville, Lauderdale and some trash haulers without recycling facilities. Waste Management did not respond to a request for which other cities they handle.

Recycling contracts are complex in part because of the arrangement between cities and processors over how revenue will be split from sale of the materials.

The sale of recycled goods has traditionally offset the cost of processing them, leaving cities with extra funds to keep resident fees low. But a downturn in global commodities markets, driven in part by weakened demand by China, has left some cities owing money to their processors.

Minneapolis' selection panel said the two companies proposed the same revenue sharing split. But Eureka also offered a lower processing cost and agreed to waive its share of the revenue when the cost of processing outweighs the material's value.

St. Paul's decision to go out to bid was spurred in part by a desire to increase participation in recycling across the city. In addition to Eureka and Waste Management, Republic Services and Tranquility Housing, a local trucking company, have also submitted bids. Republic is the country's second-largest waste firm.

St. Paul is aiming for a 15 percent increase in participation and a 35 percent increase in the volume of material recycled, said Joe Ellickson, a spokesman for the city's Public Works Department.

Figures from both cities show St. Paul's recycling volume stayed mostly flat from 2010 to 2014 while Minneapolis' jumped with the introduction of single-sort recycling in 2012. St. Paul implemented single-sort in 2014.

St. Paul has a number of strategies to reach its goals, including a switch from recycling bins to carts with wheels and lids. That move was put on hold in 2015 when Eureka said the change would force household recycling fees up by approximately $17. The city said those costs are not reflected in Eureka's new bid.

"Our hope is we can reduce our cost overall with the new expanded contract," said Kris Hageman, St. Paul's environmental coordinator.

City staff are reviewing and scoring the bids, she said. After negotiations with the company that has the top proposal, the contract will go to the St. Paul City Council for approval.

Eric Roper • 612-673-1732

Jessie Van Berkel • 612-673-4649