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Responding to the Recycling Markets: How to Adapt Your Franchise Agreements to the “New Normal”

April 7, 2019

Summary

2018 presented our industry with a number of new challenges: China’s Blue Sky policy and resulting market impacts being among the top. As the market value of post-consumer recycled commodities remains at historical lows, more and more haulers are asking local jurisdictions for financial and/or operational relief. How are local agencies responding? How have franchise agreements changed to address recycling market volatility? When (if ever) should you permit your hauler to dispose of recyclables that can’t be marketed? Are there funding mechanisms that can help jurisdictions address commodity value fluctuations over time? What tools might you already have in your agreement that can help? Answers to these questions will be at the forefront of this presentation. Since the market downturn, HF&H has helped a number of agencies procure new, or modify current franchise agreements to address the current state of recycling markets; several case studies will be presented. 

This presentation will:

  • Provide a high-level overview of the current state of recycling markets and their impact to local jurisdictions and haulers in California.
  • Educate the audience on current strategies being utilized by local jurisdictions to address fluctuating commodity values.
  • Showcase new funding mechanisms that can help offset rising processing costs, without giving up future “upside” if and when the markets recover.
Presenter

As Vice President of HF&H, Marva Sheehan brings 40 years of financial and accounting experience to HF&H. For the past 25 years, Ms. Sheehan has worked as a consultant and controller in the solid waste industry.  During her 14 years with HF&H, she has managed rate review projects, rate surveys, billing and franchise fee audits, procurement and contract negotiations, and financial and operational reviews for jurisdictions throughout California.