TERU Focus Report - Auditor's Office Rips CalRecycle
Recycling Program Logs Repeated $100MM Annual Deficit
November 8, 2014 -- Michael Theroux
What's wrong with this
picture? The Beverage Container Recycling Program administered by the California Department of Resources Recycling
and Recovery, affectionately known as CalRecycle, just went through the State Auditor's own Shredder.
California's Bottle Bill was enacted in
1986. Lately, CalRecycle has been claiming 85% Recycling of cans and bottles supposedly sold in-state as
mandated by law, while doling out $100 million per year more than it collected in three of the last four fiscal
Beverage containers to be sold in California bear a
California Redemption Value (CRV) symbol, and distributors who do sell in the Golden State pay a fee to do so. The
CRV fee is tacked onto the price of each container at the store that the buyer pays. Yet cans and bottles are also
sold in other states where those fees are not cycled back to California. Folks collect those out-of-state cans and
bottles and truck 'em back across state lines to collect a hefty per-container fee without putting any money into
the system, a $100 million deficit per year.
The Auditor's Office has offered recommendations to both the
Legislature and to CalRecycle. Beef up the laws to increase revenues, and reduce program administrative costs.
Catch up with the data already collected for a real picture of the scale of the fraud, go after the offenders, and
enforce the penalties. Extend beyond CalRecycle's current Cal Food and Ag collaboration toward broader Board of
Equalization engagement to shift the payment burden from the Public and the Distributor back to the Consumer by
implementing a much larger point-of-sale charge.
Just the Facts
The CalRecycle program-audit Report 2014-110 released November 6, 2014 is subtitled,
"Beverage Container Recycling Program Continues to Face Deficits and Requires Changes to Become Financially
Sustainable". The state has graciously provided both a one-page Executive Summary
and a separate one-page Fact Sheet, perhaps because they recognize few will slog through
the entire 65-page in-depth report:
- In the last four fiscal years, the beverage program has been operating with an annual deficit in which
the revenue generated was insufficient to cover expenditures.
- The beverage program's collective gap between revenues and expenditures across all five program funds
has exceeded $100 million over three of the last four fiscal years.
- There are viable options available that CalRecycle and the Legislature may want to consider for
enhancing revenue and reducing expenditures to the beverage program.
- CalRecycle needs to better respond to the fraud risk presented by the importation of out-of-state
beverage containers for recycling refund payments.
- CalRecycle is unable to demonstrate that it is focusing its limited resources in the areas of highest
risk to ensure the greatest financial return to the beverage program.
The audit does just what it set out to do, myopically
cutting out and judging one in-trouble program from the surrounding herd of CalRecycle's in-trouble Resources
Recycling and Recovery efforts. Consider AB 341, the state's mandatory Commercial Recycling bill, impacting about a
half million businesses and multi-family residences, and setting a goal of 75% total recycling to be achieved by
2020. Recycling "beverage containers" would seem to be a natural element of recycling everything else in the state,
yet a quick search of the Auditor's Report finds not one mention of AB 341.
The agency's website indicates the state's waste
characterization understanding is based on its 2008 waste characterization. Much has changed in the past 6 years, yet
it was upon this basis that AB 341 was designed and is now being implemented. In the 2008 state assessment,
glass, metal, and plastic counted for just over 15% of the total 40 million tons of overall disposal, or about 6
million tons. Beverage containers logically will only account for a fraction of that tonnage. California's beverage container recycling rate
is presently claimed as 84%, but there is no direct correlation provided
or even assumed between landfill disposal and Bottle Bill program recovery.
CalRecycle is currently engaged in the expansive
2014 Waste Characterization Study, noted as the largest study the
agency has ever undertaken. If indeed the data management from just the Bottle Bill fraction of Recycling has
proven far too much, how will this incoming state-wide detail ever be accurately collected and organized, much
Silos of Law inevitably create overlapping and usually
conflicting regulations. Finding a realistic, economical fix for the Broken Bottle
Bill within the auspices of CalRecycle's mis-administration without thoroughly checking for fit with AB 341 is
High-grading the easily-sorted cans and bottles from
of Trash has for years
been taking more away from California than the entrenched Recycling Industry puts back. Perhaps the problem
is not one of trucks crossing our borders loaded with illicit beverage containers. Rather, the
process is broken and the entire concept of what constitutes Recycling
needs to be scrapped and rebuilt. Remember our mantra: Everything is Recyclable with the Right
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this report as long as no changes are made to its content or references and credit is given to the author,
Michael Theroux. http://www.terutalk.com