Montgomery to retry recycling with new company, same method

Those who have been feeling blue about a lack of recycling in the city might be feeling green soon enough.

Mayor Todd Strange announced Tuesday that the city has partnered with Repower South, a recycling and renewable energy company that will bring recycling to the city for the first time since October 2015, when the $37 million Infinitus Renewable Energy Park (IREP) closed because it failed to bring in enough revenue from its recyclables because of low commodity prices.

"It is all about Montgomery being an environmental city, a green city and a place that millennials want to be," Strange said, touching on the city's ongoing plan to attract young professionals.

The newly named city of Montgomery's Recycling and Recovery Facility is expected to open in November or December, slightly behind Strange's original goal of an October start.

Repower will foot a $12 million bill for additions to the facility that company officials said will help overcome revenue deficits that ultimately doomed IREP. About $7 million of that investment will be in the city's name, ensuring it stays under its control if the second attempt at using the facility fails as well.

"We are excited to be back in the recycling business. One of the most exciting things that I heard from the mayor, as the finance guy, was no additional charge to the city," said finance director Barry Crabb, who was heavily involved in the planning. Zero city investment helped Strange hit one of his biggest goals of the project, which was to not put any more of Montgomery's money into the project.

Repower South CEO Justin Converse said the facility will take about 60 percent of the materials and recycle or turn them into fuel, allowing them to raise enough profit to run the facility. The company will also have no debt on the facility, he said, a point that the city stressed during negotiations after IREP's debt caused legal issues.

The new project is expected to create 50 high-paying jobs once the plant opens later this year.

The facility will decrease landfill costs by reducing the amount of materials put into them, Crabb said. Last time the city had to install a new area for landfill, it cost about $2.8 million, he said.

There is an opportunity for the city to earn up to $200,000 a year if Repower turns enough profit, officials said, though they stressed that the profit-sharing was more of a good faith agreement than anything else. The facility will also help Maxwell Air Force Base comply with federal recycling mandates.

At Tuesday's news conference, leaders said that Montgomery will once again try out a mixed-materials recycling method in which all garbage is collected and sorted together. That method could theoretically yield higher recycling returns and circumnavigate the public participation needed for a two-bin system.

There is risk, however, involved with rebooting the previous system of recycling. It failed in 2015 due to a low commodities market for recyclables and the perception by some in the recycling industry that mixed-materials recycling facilities — often called "dirty MRFs" — produce low-quality recyclables due to contamination from other garbage.

The facility may also be too large for Montgomery. Some recycling companies that examined the facility in 2016 said the city does not produce enough trash to sustain a facility of that size. In its final year, IREP received only 78,000 tons of trash from the city and approximately another 24,000 tons hauled in from north Florida and areas around Montgomery. The facility has been estimated to need about 150,000 tons of garbage annually to be profitable as a MRF.

“I went with the intent to see if there were enough tons to flip the switch and make it a go,” said Birmingham Recycling and Recovery General Manager Pete Biddlecome in 2016 after touring the facility. “Since this is our core business, we have a pretty good finger on the pulse of how many tons you need to sustain an operation like that. When your system runs you a $15,000 a month power bill, you have to see if it makes fiscal sense. We determined after a few hours that it did not."

Of the four major Alabama cities with a similar population size (Huntsville, Birmingham, Mobile and Montgomery), Alabama’s capital city is the only one without recycling and the only one facing doubts about its ability to sustain a recycling program.

The city was given ownership of the facility in January after a lengthy fight in bankruptcy court where creditors claimed partial ownership. The city paid $625,000; $125,000 in other fees (including IREP's legal fees); and $195,000 in property taxes IREP accrued after the company closed its doors. 

Crabb previously said in March the $195,000 property tax is divided among the state (18 percent); school system (27 percent); county (21 percent); and Montgomery (34 percent). That means the city paid nearly $67,000 to itself, and Crabb said they were able to come to an agreement to recover the county portion, and were still working with the state.

The city also paid about $125,000 to clean the facility after the company folded and forgave $2.5 million IREP owed due to trash it deposited at the city landfill. 

The city now owns a clean title to the facility, the debt of which the city is servicing at $2.175 million a year with $29 million left to pay on it.

Repower South, the company backing the project, is currently developing a $50 million recycling and recovery facility in Charleston, South Carolina.