Funding trouble deepens for California container deposit program

Funding trouble deepens for California container deposit program

By Editorial Staff, Resource Recycling

The California Department of Resources Recycling and Recovery (CalRecycle) has released its July 2013 quarterly report on its Beverage Container Recycling Fund, and the outlook is not encouraging.

Echoing CalRecycle's April 2013 report, the latest numbers indicate that, without major reforms to the current bottle deposit system, the recycling fund will be insolvent by March 2015. The latest data, in fact, projects month-by-month funding levels for the coming years that are below the levels laid out in the April report. In short, the most recent forecast shows cash levels in the account falling below the "prudent reserve" level sooner than was previously envisioned.

"It already was a challenging situation," Susan Collins, president of the Container Recycling Institute (CRI), told Resource Recycling, "and it looks like it is getting worse."

The recycling fund collects all the deposits paid for covered containers and then pays out when bottles get redeemed. The system relies on a percentage of containers remaining unredeemed, using that surplus to pay for the program's logistics, grant programs, market development and payments to cities.

Because containers are now recovered at such a high rate in the state (recently pushing beyond 80 percent), the surplus has steadily dwindled and future funding is uncertain.

If no remedy is found, the report indicates, the fund would need to be cut its support to recycling programs by 75 percent during fiscal year 2014-2015 and 100 percent by FY 2015-2016, effectively ending program funding. Reductions of that magnitude would endanger numerous services including redemption centers, according to Collins.

CalRecycle has proposed a series of reforms to the program, but it's unclear how effective the proposed initiatives could be in terms of solving the funding problem.

Redemption rates neared 83 percent for beverage containers during FY 2011-2012. That figure far exceeds the "break-even recycling rate of approximately 70 percent," from the report.

Fraud has also been an issue for the fund, as out-of-state beverage containers have had an impact on California's already-overloaded redemption system.

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Comments

California Container Recycling

  Mismanagement of the California Beverage Container Recycling Programs has allowed rampant fraud that threatens the Fund solvency. Uncontrolled subsidies have helped to attract fraud and have allowed those that control large amounts of those subsidies to manipulate the market and expand into markets never contemplated by the legislature. Those companies have predominantly been from outside of California. The Department has a long history of underground regulation abuse. Their admission to the Office of Administrative Law is a primary example. This underground legislation has been the basis of numerous violations, accusations, penalties, and revocations in violation of Government Code. Instead of effectively targeting out-of-state rings set up to defraud the program, the Department focused on small recyclers while failing to give them regulations to prevent abuse.Has targeted small recyclers in an attempt to give the appearance that their tough on fraud. The fact remains that the Department has failed to adopt regulation that would give recyclers authority to refuse suspected material Has targeted small recyclers in an attempt to give the appearance that their tough on fraud. The fact remains that the Department has failed to adopt regulation that would give recyclers authority to refuse suspected material Has targeted small recyclers in an attempt to give the appearance that their tough on fraud. The fact remains that the Department has failed to adopt regulation that would give recyclers authority to refuse suspected material H has targeted small recyclers a as targeted small recyclers in an attempt to give the appearance that their tough on fraud. hashS targeted small recyclers in an attempt to give the appearance that their tough on fraud. The fact remains that the Department has failed to adopt regulation that would give recyclers authority to refuse suspected material Has targeted small recyclers in an attempt to give the appearance that their tough on fraud. The fact remains that the Department has failed to adopt regulation that would give recyclers authority to refuse suspected material  has targeted small

Leonard Lang

Recyclingandregulation.com

UBC Fraud In CA

This article is grossly underestimating the fact of how much impact the UBC fraud that is happening in CA.  This is much greater a problem that this article even comes close to discussing.  All the numbering states, like Arizona, have had a very large number of disengenuous buyers paying well over the market price for UBCs for years.  Clearly, they can only be funding these numbers by going into California and illegally collecting the redemtion value and defrauding the State of California.  California needs to really address this problem and work within itself and its neighbors and crack down on this illegal act.

CA Container Recycling

  

Mismanagement of the program has allowed rampant fraud which now threatens the funds solvency. Improper attempts to control that fraud have led to abusive enforcement by abusive statute and regulation.Uncontrolled subsidies have helped to attract fraud and have allowed those that control large amounts of those subsidies to manipulate the market and expand into markets never contemplated by the legislature. Supermarkets now receive exorbitant rents that were never intended. According to the LA Times fraud may exceed $200 million per year of the $1.2 billion annual redemption payments.

Leonard Lang
recyclingandregulation.com

CRV Fraud in California

The Beverage Container Recycling Program in California needs to be overhauled and updated so fraud is discouraged and cheaters are prosocuted.

1.  Stop the practice of commingling, pay only for CRV containers.  Most of the "legal" recycling centers push commingling so they can pay customers CRV for containers that are mostly non-CRV!  These centers also receive massive amounts of CRV and Handling Fees for non-CRV containers!

2.  Since most beverage containers today are CRV there is no need to still allow commingling.  For example, when the program started in 1987 there were lots of containers that were not CRV (water, non-carbonated drinks,etc) but that was all changed in 2000 when these containers were included in the program.  To still have commingling today is a HUGE drain on the fund.  IT IS BEING EXPLOITED BY MOST OF THE CERTIFIED RECYCLERS!

3.  CalRecycle has to dramitically step up the enforcement by having more field auditors that are actually auditing recyclers, especially Handling Fee eligible recyclers.

Commingled Loads and Mismanagement

Certified recycling centers don't "push Commingling". That was legislated in the beginning of the program and it can hurt the recycler profitability by reducing processing payments.

Commingling with permitted by the original legislation to encourage recycling, one of the two goals of the program. Litter reduction being the other. Whereas most aluminum containers are CRV, it does not apply to plastic and glass which far exceed aluminum. In fact, a load of glass could be all CRV but if any containers are broken, it then becomes commingled per regulation. CalRecycle has dramatically stepped up enforcement but focuses on small minority owned recyclers who lack the ability to defend themselves. Currently a number of recyclers have had their reimbursements illegally withheld leaving them without the funds to operate. CalRecycle, after leaving the recyclers without the funds to operate, then moves to forced closure. The recycler is left without the right of appeal and due process along with losing their life savings. The government and opportunity that these immigrants left their homes for now forces them to lose their life savings and becomes the persecutor. amental part of the original legislation

As for the field auditors, most lack the qualifications and training. I doubt that there's a certified recycler in this program that hasn't been given contradictory instructions by different auditors. Most lack knowledge of the regulations and the property to be unbiased in the performance of their duties. Just recently one of those auditors told me that regulations were subject to interpretation. This reflects the California State Auditor's report documenting ineffective management within the Division of Recycling.

Here's some links that might help you with your education of the facts:

Not knowing what a regulation is, see page 786 http://www.oal.ca.gov/res/docs/pdf/notice/21z-2013.pdf 

Ineffective management      http://www.bsa.ca.gov/reports/summary/2010-101 

Certified recyclers are victims fraud  http://www.bsa.ca.gov/reports/summary/2010-101                   

http://oag.ca.gov/bi/recycle

 Leonard LangLeonard Lang
recyclingandregulation.com

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