January 1, 1998

Four contenders line up to bid for recycling facility

Representing the four companies competing to build a new recycling facility for Boulder County are, left to right, Eric Lombardi, executive director of Eco-Cycle; Sean Duffy, chief operating officer of Charlotte, N.C.-based FCR Inc.; Jeff Callahan, Boulder County Recycling and Composting Authority, which will oversee the recycling operations, Gary XX of Western Disposal; and Todd Grier, sales manager at Waste Management of Colorado.

The past 20 years have seen recycling blossom in Boulder.

Eco-Cycle, widely recognized as one of the country’s premier recycling companies, has evolved from a volunteer, ragtag operation that used dilapidated school buses for curbside pickup to a well-oiled, city-subsidized organization that cruises to your curb in sophisticated trucks, courtesy of Western Disposal.

Recycling’s newest incarnation is the Boulder County Recycling and Composting Authority, which came about in 1994 as a result of voters’ approval of a 0.1 percent sales tax that is expected to raise about $23 million by the time it expires in 2001.

The intergovernmental authority is made up of board members representing each municipality and community in Boulder County. Its goal is to divert half the county’s trash from landfill by 2005, according to Executive Director Jeff Callahan. To achieve that goal, the authority sent out a request for plans from vendors to design, build and operate a countywide recycling center.

Bids are due Jan. 28; a contract is expected to be awarded in March.

Although the recycling business isn’t exactly a get-rich-quick industry, four contenders — Eco-Cycle, Western Disposal, Waste Management of Denver and FCR Inc. — are preparing to duke it out for the opportunity to run the new facility.

Eric Lombardi, Eco-Cycle’s executive director, is pumped. “A new facility with a roof! It’s something we’ve been dreaming up for a long time.” Eco-Cycle’s open-to-the-elements facility is notorious during wind storms.

Lombardi says the three criteria the authority is looking for include experience, design and price, and that his company has all three.

“We’re not at all intimidated. We designed and built our co-mingled container line, the first in Colorado, with $1,000 worth of old Celestial Seasonings conveyer belts. Now all the modern machines are built on the same principles. We did the same thing with the elevated paper sorting line — the sky sort.’ Now the sky sort is standard industry practice.”

According to Lombardi, Eco-Cycle’s bid will be competitive, and although he’s not expecting a low-bid situation, he says all the vendors will be cutting their margins very low, to about 5 to 15 percent.

“There’s not a lot of money in it for anybody since there’s no profit in recycling right now,” he says. Plus, as a non-profit organization, Eco-Cycle doesn’t have the burden of satisfying stockholders. “Whatever dollar we make the community makes because of our environmental education staff. We fund that staff through any money we make off the sale of recyclables.”

Western Disposal also has been committed to recycling, says Anne Peters, a spokeswoman.

“Like Eco-Cycle, we’ve been committed to recycling for 20 years, and as a local firm we really know the local needs,” Peters says. She is also confident of Western’s design of the new facility since “we have a very strong design team from award-winning architects and engineers.”

But Western’s real forte, according to Peters, is operations.

“We are fanatics about operational quality. Everyone that comes through our facility says it looks more like a research facility than a trash hauling company.”

Because of the company’s high standards of maintenance, Peters says, Western gets 14 years out of its trucks, when the industry standard is seven. The company also has extensive safety and training for all employees.

Peters makes clear that running the recycling center won’t be a major profit center for Western.

“Profit margins vary tremendously, just like any commodity. Some of what the authority is hoping to build in is some protection from market vagaries (by subsidizing the operation of the facility),” she says.

Plus, she continues, the important thing is Western’s “fanatical commitment to recycling. We don’t recycle because we’re going to make tons of money but because our customers want it, and we believe in it.”

Boulder may be a little far afield for Charlotte, N.C.-based FCR Inc., but Director of Business Development Dick White is confident about his company’s chances.

“Our main business is to design, build and operate MRFs,” he says. “MRF” is industry shorthand for “material recoveries facility.” In business since the early 1980s, FCR currently operates 11 facilities around the country, primarily in the East and South.

The company’s newest strategy involves vertical integration as a way to process recyclables. In the past year FCR purchased four insulation companies — two in Florida, one in Portland, Ore., and one in Phoenix — that turn paper into blow-in insulation. FCR also bought a plastics company that “re-pelletizes” HDPE (No. 2 plastic), and sells the pellets as raw material for making new plastic products. White says the company has other agreements to market PET and other types of plastics.

According to White, not only is FCR the most experienced, “our price will be the best, of course.”

“The way we would make money is to operate efficiently,” White says. “We are in business to make a fair profit. It is not an extremely profitable business. Vertical integration helps level a cyclical business — we are guaranteeing our end market so we will smooth out our cycle for cash flow and ensure the longevity of the business.”

Waste Management of Denver, headquartered in Oak Brook, Ill., is part of the largest solid waste company in the world, making it the most qualified contender, says General Manager Bruce Jensen.

“Of all the bidders, one does not operate a MRF, one operates a non-profit MRF, and one operates 11. We operate 120.”

With three processing facilities in Denver, one in Colorado Springs and one in Fort Collins, Waste Management has a huge local presence.

Jensen makes it clear that his company is motivated by profit, and since that’s the case, the more facilities Waste Management has the better, because profitable MRFs can subsidize unprofitable ones.

“History shows there are some commodities I’m selling today at the same price I sold in the early ’80s. In some areas we don’t make money; in other areas we make money. There’s no reason for us to bid if we can’t make money on the project, and based on Boulder County we feel that we could make money on this project.”

Representing the four companies competing to build a new recycling facility for Boulder County are, left to right, Eric Lombardi, executive director of Eco-Cycle; Sean Duffy, chief operating officer of Charlotte, N.C.-based FCR Inc.; Jeff Callahan, Boulder County Recycling and Composting Authority, which will oversee the recycling operations, Gary XX of Western Disposal; and Todd Grier, sales manager at Waste Management of Colorado.

The past 20 years have seen recycling blossom in Boulder.

Eco-Cycle, widely recognized as one of the country’s premier recycling companies, has evolved from a…

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