Single-stream recycling has proven costly for the state’s largest trash collector, as the Hartford-based Materials Innovation and Recycling Authority, commonly known as MIRA, has agreed to pay $1.3 million to the contractor that processes its recycling over claims that excessive contamination violated the contract with the processor.
FCR, owned by Republic Services, processes the recyclable materials that MIRA collects from 44 towns in the lower Connecticut River Valley. FCR sued MIRA in May 2019, alleging that deliveries to the recycling facility consistently contained more than 5 percent non-recyclable waste, which violated the terms of its contract.
A November ruling from Connecticut Superior Court Judge Carl Schuman found that excessive contamination did violate the terms of MIRA’s contract with FCR, and ordered MIRA to pay a net $1.09 million in damages to the processor. Schuman also entered a declaratory judgement that MIRA was in default of its contract, allowing FCR to terminate the contract.
MIRA was appealing that ruling, but a unanimous vote on Monday to pay a settlement of $1.3 million to FCR by the quasi-public’s board of directors would end the legal proceedings. The board also transferred an additional $2.6 million to its operating fund to pay for the recycling facility’s operation through the end of the fiscal year on June 30.
FCR will continue to operate the facility, at a rate of $110 a ton of materials, until at least April 30. The next contractor will use the same recycling facility in Hartford.
The original complaint by FCR alleged that MIRA allowed haulers to deliver loads of single-stream recyclables that came from more than one municipality, and failed to monitor those loads for contamination.
FCR argued it was operating the facility at a “substantial loss” because of the added costs from managing “a much more contaminated recycling stream than it ever agreed to process.” A consultant hired by FCR estimated that more than 30 percent of its incoming recycling stream was not recyclable materials – more than six times the 5 percent threshold spelled out in MIRA’s contract. A DEEP study in 2015 estimated about 20 percent contamination.
Schuman wrote that MIRA did not act in bad faith, as FCR alleged. Rather, he wrote, the excessive contamination was the result of contract disputes, flaws in single-stream recycling and “challenging economic and political circumstances.”
FCR reported contamination issues to MIRA as early as 2015, in a presentation about changes in the recycling industry, warning that residents were using “the recycling cart as an extra trash can, contaminating the stream with food waste, dirt and plastic bags,” Schuman wrote in his decision.
FCR did not complain to MIRA in writing until 2018, Schuman wrote – around the time that China implemented its “sword” policy, rejecting most imports of recyclable materials over concerns the materials were too contaminated with waste to be processed economically.
In court proceedings, MIRA argued FCR violated its terms of the contract by not keeping the facility clean and maintaining the “highest industry standards.” MIRA showed photographs that showed debris clogging the machines inside the facility, and piled up outside, Schuman wrote.
Schuman ordered FCR to pay $110,482 for its breach of contract, which was subtracted from MIRA’s total penalty of $1.2 million.