UPDATE March 19, 2018: As negotiations between Friedman Recycling and multiple Southwest cities continue, one city is already taking steps to alter accepted materials and pricing ahead of a potential change in contract terms, as reported by the Las Cruces Sun News.

The South Central Solid Waste Authority (SCSWA) is asking residents of Las Cruces, NM to voluntarily focus on recycling the "Fab 5" — clean corrugated cardboard, #1-2 plastics, printer paper, aluminum cans and steel cans. Material such as thin cardboard, mixed paper and other plastics will not be banned yet, but are seen as less desirable.

Additionally, the SCSWA may also consider a small rate hike at an upcoming board meeting. Per a six-month contract amendment that expires in April, rebates from Friedman have already been suspended and the SCSWA is responsible for back-hauling any contaminants or residuals. If Friedman can't find markets for #3-7 plastics within 90 days, that material will also have to be back-hauled.

Dive Brief:

• Southwest municipalities in New Mexico and Texas are facing similar decisions as some of their Western neighbors about whether to change the price structure or offerings in curbside recycling programs. What makes the region's situation unique is that it only has one processor to choose from — Friedman Recycling. The company is now trying to renegotiate terms after its original cost structure was flipped "completely upside down," according to President Morris Friedman.
• In El Paso, TX — home to one Friedman MRF — local officials have resisted the idea of higher processing costs, as reported by KVIA and the El Paso Times. The city's contract stipulates $75 per ton through 2030. Friedman is requesting $115, which the city estimates could cost an additional $10 million over the next five years. Whatever happens here will also affect options for smaller municipalities such as Las Cruces, NM.
• Albuquerque is in the midst of its own contract talks with Friedman around processing costs at a second local MRF, which could have ripple effects for Santa Fe. Local officials also don't want to change their program yet. "Even if we do agree to alter what they get to count as residual, I don't believe there's a desire on the city's part to change what people can put in the cart," said Acting Solid Waste Director Jill Holbert. "We're looking at this as a temporary measure." 

Dive Insight:

Recycling challenges in the Northwest and Northeast have frequently been in the news, but the Southwest has also been struggling for months. The New Mexico Recycling Coalition got ahead of the issue with guidance for members in September, around the time municipalities stopped seeing any rebates from Friedman.

Last month, NMRC Executive Director Sarah Pierpont told Waste Dive local facilities were "bursting at the seams" and she was concerned about how much further the situation might deteriorate. 

Being the sole processing option for much of New Mexico has left Friedman Recycling with the unpleasant task of asking customers for more money without any other local comparisons.

Friedman told Waste Dive his company has slowed down processing speeds and staffed up, like many others. Coupled with prices for mixed paper bales as low as -$40 per ton at West Coast ports, this hurt finances to the point that he's even raised the possibility of closing the El Paso location as a last resort.

"It's definitely a tough situation. We don't want to turn the material stream off, but at the same time we want to make sure that we're economically viable," said Friedman. "It's a fine line to walk."

The Albuquerque MRF is relatively new, so operations have been slightly less challenging than in El Paso. Friedman also has a MRF in Phoenix, which primarily handles commercial material and can more easily adjust to price increases. 

Because negotiations are ongoing, no parties were willing to discuss specific figures yet. Friedman did confirm he expects new terms could be finalized for Albuquerque and Santa Fe within the next few weeks.

According to Holbert, Albuquerque has been using FleetMind to help track household contamination data during collections and will be doing more to clean up the stream. The city will likely absorb any additional costs rather than ask for a customer rate change at this time.

El Paso, on the other hand, is farther away from a resolution. This also means continued uncertainty for Las Cruces. Following an inconclusive El Paso City Council meeting this week, the South Central Solid Waste Authority put out a notice reminding residents about contamination but urging them to recycle as usual.

"The city of El Paso is making all the calls and they still are," said SCSWA Director Patrick Peck during a recent SWANApalooza panel.

This shift is especially frustrating for Las Cruces, which touts a high participation rate and was named the top government program in the U.S. by the National Recycling Coalition in 2017.

Regional communication between cities is vital, but Peck also emphasized the need for transparency with citizens. He recently published an editorial on this topic and announced plans to serve on SWANA's new National Recycling Task Force.

"We're trying to put our side of the story out," Peck told Waste Dive about his messaging strategy. He said they were also balancing customer confidence in the system. "You don't want to get people to panic."

Both Peck and Pierpont agree that single stream collection has exacerbated these challenges, but see no viable way of reversing course in larger communities. Meanwhile, those without it are faring slightly better.

"A lot of the smaller towns that have source-separated are still able to process it as normal," said Pierpont. "They might not be getting the same market price for the materials, but they're still getting something for it."