Charleston County recycling contract not working out as Horry County leaders had hoped

Solid Waste Authority officials no longer expect a recycling contract with Charleston County to net more than $1 million, but they insist the agency will be in better financial shape because of that agreement.

Nearly six months into the deal, the SWA’s recycling center budget is about $74,000 in the red. Agency leaders attribute the deficit to lower than expected commodity prices, an influx of flood-damaged materials in the fall and some upfront maintenance costs. Yet they maintain the agency would be looking at a shortfall of $176,000 without the Charleston County contract and they hope their budget will soon return to the black. Last month, the SWA’s recyclables revenues exceeded expenses by more than $20,000.

“If we can continue to operate and have any sort of positive revenue and keep those materials out of the landfill, then it’s going to be a good deal,” said Lance Thompson, the SWA board chairman. “We’re going to see a turnaround. We already did last month. We’re continuing this month.”

The SWA manages the county’s waste and recycling programs. Last summer, agency leaders signed a contract to process Charleston County’s bottles, cans, cardboard and other recyclables at the authority’s facility on S.C. 90. The recycling center separates and bales the items and sells them to places that convert the recyclables into useable material, such as carpet made from old soda bottles.

Initially, authority leaders touted the financial benefits of the deal, saying the local facility could receive 72,000 tons of Charleston County recyclables throughout the next two years, netting more than $1 million.

That money would be important, SWA leaders said, because they had anticipated a $600,000 revenue decrease in recyclable sales revenue. They also said a 2014 council decision to allow some construction waste to be hauled to landfills outside Horry lightened the SWA’s coffers.

But Thompson acknowledged those early projections were not accurate.

“It’s interesting how so many of those things are tied to oil prices and petroleum-based plastics,” he said. “Of course, not one of us could have expected we were going to be paying $1.50 a gallon for gas and anticipating [prices] to go even lower.”

Along with lower commodity prices, October’s heavy rains saturated many recyclables in Horry and Charleston counties, affecting their ability to be reused. And the SWA spent about $86,000 on maintenance, which was in the budget but not in the first five months of the year.

To manage costs, the SWA has adjusted the shift schedule at the recycling facility and renegotiated the trucking agreement with Charleston County. At least through next month, Charleston County will pay to transport its recyclables to Horry. SWA leaders said that may change if recyclable sales improve.

Had the SWA not signed the Charleston County contract, officials estimate the low commodity prices would have placed the agency in a $176,000 deficit.

“It definitely has a huge impact,” said Jan Bitting, the agency’s finance director. “We would have seen a deficit just based on our material.”

Despite the SWA’s recent struggles, Horry County Council seems pleased with the adjustments the agency has made over the last few months.

During a presentation to the council’s Infrastructure and Regulation Committee last week, committee chairman Johnny Vaught praised the agency’s response.

“We’re staying on top of this,” the councilman said. “We all went into this with our eyes wide open but not knowing what kind of snakes there were out there under the logs.”

Councilman Jody Prince agreed, saying the SWA’s recycling efforts were not intended to be moneymakers but to prolong the lifespan of the county landfill.

“I’d like for the county to make money,” Prince said. “But the key here, the whole reason for this, is to keep this [material] from going into our landfill.”

This story was originally published January 30, 2016 at 4:00 AM with the headline "Charleston County recycling contract not working out as Horry County leaders had hoped."