More numbers behind Houston's in-limbo recycling program. Mike Morris, HoustonChronicle.com($$$)
Houston has always paid to deploy its trucks and drivers to collect residents' recycled items,but the plunging commodities market makes this the first time Houston has faced a direct cost to process the recycling once it is picked up. In the past, the city either made money when the recyclables were resold, or, if there was no money left over, the city's contract ensured it paid nothing out of pocket.
Now, Waste Management has negotiated away that "zero floor," and has hiked its processing fee from $65 per ton to $95 (in the four-year deal) or $104 (in the one-year deal Turner sought).
It is not unusual for a company to seek a higher rate for a shorter term contract. Longer contracts come with discounts due to the fact that there is a longer guaranteed cash flow. It is quite possible that Turner, who has spent his entire career in the political arena, does not understand how this works, and thinks that Waste Management is trying to "price gouge" the City.
If that is the case then the residents of Houston need to hold on because you're going to be in for a bumpy-assed ride for however many years Turner is in office*. (lawsuit pending)
*The other scenario is that Turner doesn't care, and is content to have talks fall apart as part of his continuing effort to lift the pillow-soft revenue cap and increase taxes.
Neither scenario is promising for the long-term future of Houston.
Update: Today, the Chronicle has changed their story.
City votes to keep recycling plan after council rejects offer. Rebecca Elliot, HoustonChronicle.com ($$$)
City Council members balked at the price and the length of the contract two weeks ago, prompting Turner to step in. He had proposed a one-year contract that would pay Waste Management $104 per ton, but the company rejected that idea on Tuesday.As you can see, we're getting two totally different stories here. Yesterday the tone was different, Waste Management is price gouging and not acting as a good corporate citizen. Today, the tone is that WM did not want to accept the higher price for a shorter length.
I will say this, that latter framing of the narrative makes less sense given that WM, elsewhere in the article, states that they are ready to continue processing recycling without a contract and has a desire to continue working with the city.
Someone at the Houston Chronicle has it wrong. A media outlet with actual editors wouldn't let this happen. Maybe, at some point, we'll know the full story?
