Tag: recyclable sales

I&R Committee Hears Charleston Recyclable Update

The Horry County Infrastructure and Regulation Committee heard an update on the Charleston recyclable deal yesterday.

As with any new operation, several months of experience is needed to determine if projections in the deal are becoming reality.

With five months of solid numbers now in place, it is possible to look at what Horry County residents can and cannot expect from the Charleston deal.

First and foremost, the HCSWA can forget any expectations of making a $1 million dollar per year profit on the contract that brings recyclables from Charleston County to Horry County for processing.

When Horry County Council reconsidered second reading of a budget amendment needed to approve the deal, council member Harold Worley asked if this deal would make money. HCSWA officials answered yes.

Not realizing too much of a loss will be considered a good result.

There are several reasons for this. The assumption of 14.5% reject rate of recyclables processed is much too low. The reject rate has been in the mid to high 20’s range and that is with the best interpretation of exactly what constitutes rejects.

For example, the months of Aug through Dec 2015 saw 21,382 tons of recyclables processed at the HCSWA. Of that amount, 13,192 tons of recyclables have been sold, leaving 8,190 tons not sold.

The HCSWA does not consider all of the 8,190 tons as rejects. Some is glass that is ground up and sold at $5 per ton by the HCSWA. In December, approximately 200 tons of glass was processed, according to the HCSWA. Another 600 tons remained processed on the floor waiting to be shipped out.

You get the idea, assuming only 14.5% rejects was a pipe dream.

HCSWA Taking Charleston Recyclables

The HCSWA board voted unanimously to begin taking recyclable materials from Charleston County next week.
This approval is contingent on Charleston County agreeing to the terms of a Recyclables Processing Intergovernmental Agreement approved unanimously by the HCSWA board.

Charleston County had been sent a copy of the revised agreement four hours before the HCSWA board meeting with no comment in the interim. Sentiment among HCSWA staff members was that Charleston County would agree to the terms and recyclables from Charleston County would begin to be processed at the HCSWA material recycling facility (MRF) next week.

There were some changes from the first draft proposal the HCSWA board voted to move forward with last week.

Key changes include a two year contract with up to three additional six month terms upon the agreement of both parties.

Charleston County must guarantee Horry County a minimum of 2,500 tons per month with a maximum limit of 3,000 tons per month.

A base market value (BMV) for sales of the recyclables is set at $150 per ton. There is a 10% leeway on the BMV in each direction. If the revenue from sale of the recyclables falls to below $135 per ton, Charleston County will make up the difference to the Horry County minimum guarantee of $135 per ton. The HCSWA currently is selling recyclables processed at the MRF for $134 per month.

Horry County will share profits from the sale of the recyclables with Charleston County above a market value of $165 per ton.

A 60 day termination clause upon notice of either party is now being offered. However, the way in which it was arrived at is problematic.