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PART I: Faulty Scales, Little Oversight Could Weigh on Recycling Revenues

By Phil Wayne
Staff Writer

First of two parts

June 26 -- The private company that provides all of Santa Monica’s curbside recycling income has used scales found to be under-weighing, placing in question the tonnages reported and amounts paid to the City, which exercises little oversight of the company, according to an investigation by The Lookout.

Four of the recycling scales temporarily taken out of service by the Los Angeles County Weights and Measures Bureau in 2005 belong to the Allan Company, which not only handles the City’s curbside recyclables, but also operates the Santa Monica Recycling Center, where three of the scales are located.

The City of Santa Monica – one of the most lucrative recycling markets in the country – has entrusted all of its blue-bin, curbside income to Allan, which has run the center since 1994.

Baled plastic bottles. (Photos by Phil Wayne)

Allan weighed more than 22 million pounds of City curbside recyclables in 2005, using a company scale that was at least temporarily under weighing, The Lookout has found. Payments to the City for blue-bin recyclables such as aluminum cans, bottles and mixed paper are based upon weights rendered by that scale.

The degree to which the scale was under-weighing and whether or not the impact on total tonnages was significant is unknown.

City officials in charge of recycling acknowledge they do not audit the company’s records or regularly scrutinize its operations, as is commonly done by the City of Los Angeles with its recycling contractors.

There have been no audits “that I’m aware of… in the three years that I’ve been here,” said Celeste Peele, the City’s Solid Waste Operations Manager. Allan Company officials “are the ones that provide all the information.

“We just take (curbside recyclables) next door, and they have a scale that weighs it, and they do the process and everything, and they provide us with the tonnages and they provide us with the revenue,” Peele said.

The revelations come to light as the City Council considers various options for the City Yard, which encompasses not only the Santa Monica Recycling Center, but also the transfer station, which handles curbside garden waste and black-bin trash.

Those options include partnering with private companies or other public agencies, expanding and modernizing the facility, having the City run recycling operations or completely turning them over to a private company, such as Southern California Disposal (SCD), which could partner with Allan.

In fact, the City was apparently unaware that the Weights and Measures Device Division had temporarily tagged the scales out of service last year until asked for comment by The Lookout.

“I don’t know about any red tags that (Allan) had,” said Gus Guzzetti, who is in charge of the transfer station, as well as the City’s recycling contract with Allan.

“I haven’t been informed of any,” he said.

When first asked, Adam Holt, who manages the recycling center for Allan, was unable to verify that the bureau had red tagged three scales at the site, including the truck scale used to weigh the City’s blue-bin collection vehicles.

Holt later acknowledged that two of the scales had been red tagged, but said he “can’t recall” if he was at the site when the inspections took place.

The City has indicated repeatedly in numerous interviews that it maintains full trust and confidence in the Allan Company.
Adam Holt manages the recycling center for Allan Company

“They’re very honest and above-board individuals,” said Craig Perkins, director of the City’s Environmental and Public Works Management department. “They’re like in a fish bowl.

“We have our trucks going in there,” Perkins said. “We’re sitting right next door, and the Yard is surrounding it. If there was something going on, we’d be able to see it.

“I’ve been in this job for over twelve years,” he said. “I have never received any information that they’re not telling us the absolute truth and that there’s any suspicion that we’re being shorted at all.”

Peele agreed. “We’ve had no problems with them,” she said. “They’re very reputable.”

The City therefore does not actually maintain – even occasionally – an onsite employee to oversee the weighing of City trucks or verify the contamination rates supplied by Allan. Contamination rates reduce the payable tonnage.

By contrast, the City of Los Angeles has “staff go out and do unannounced visits,” according to Neil Guglielmo, division manager of the Los Angeles Citywide Recycling Division.

During those visits, LA City staff scrutinizes not only the weighing, but also “the entire sorting process, the baling process… how the information is being recorded,” Guglielmo said.

“For us, that’s a way of assuring that…the City of Los Angeles is getting its fair share of the revenue,” he said.

Moreover, contractors “have to be able to validate that the scales they are using are correct,” Guglielmo said. “Comparing the trip slips and the invoices won’t tell you if the scale is not working properly.”

Unsorted curbside recyclables.

To augment oversight of data and payments presented by recycling contractors, cities such as Los Angeles typically conduct regular waste characterization studies, which determine the average percentages of aluminum, plastic, paper and other materials in truckloads of recyclables.

This gives a rough idea of the theoretical worth of the blue-bin stream and provides a benchmark against which tonnage reports and payments can be compared.

Asked in January when the last such study was conducted in Santa Monica, Perkins replied, “That’s a good question. We haven’t done that in a long time.”

“We did a waste-characterization study,” said Guzzetti, but it was “years ago.”

While the City of Santa Monica conducts few inspections, it also does not check in with the Weights and Measures Bureau to inquire about Allan’s record, according to Wes Thompson, the City’s solid waste supervisor.

The Weights and Measures bureau inspected the scales at 196 retail recycling locations last year, said Jeff Humphreys, the agency’s deputy director. The scales at 180 of those locations were approved, while scales at 11 of the locations were tagged out of service for under-registering, favoring the recycler, Humphreys said.

At the remaining five locations, scales were tagged for repair for over-weighing, which favored the customer, Humphreys added.

None of the Allan scales in question favored the customer. However, the company was responsible for four – three at the Santa Monica Recycling Center – that were tagged by the bureau for under-weighing.

In addition to weighing curbside recyclables for the City, scales at the site also are used to weigh bottles and cans brought in by the public, including items redeemed for California Refund Value (CRV).

Customers bring recyclables to buy-back scale.

Based on a complaint, bureau inspections were conducted at the Santa Monica Recycling Center in April 2005, when “2 scales were tagged out of service due to underregistration (favoring Allan Co),” Humphreys wrote in an email to The Lookout. He did not identify which ones were red-tagged.

According to Holt, the recycling center manager, there are five scales at the site. After initially saying he didn’t know which scales were faulty, he consulted with Rudy Martin, Allan’s recycling center supervisor.

Holt later identified one as a rarely used “tenth” scale for weighing small quantities of aluminum. He was, however, still unable to identify the second scale taken out of service in April 2005.

Both scales received a yellow seal of approval from the bureau about six weeks later, when they were re-inspected and found to be in correct working order, Humphreys said.

But again in July, another scale at the site was placed out of service for under-registration, according to Humphreys. On that occasion, it was the truck scale that was found to be faulty, Holt said.

Although the Weights and Measures Bureau again needed several weeks to re-inspect and approve the scale, Holt said that a “certified independent scale company that we use” came to the center “about two hours after the County had red-tagged us.”

The company, American Scale, repaired the scale and removed the bureau’s red tag, resulting in little or no interruption of service, Holt said.

It is unclear how long each of the scales in question had been under-weighing before being tagged by the bureau. But Holt said that American Scale checked the truck scale about three weeks prior to the bureau’s July inspection and it “was weighing correct at that time.”

Allan also operates a recycling facility in Baldwin Park, where a May 2005 inspection found a scale there to be “under-registering” as well.

While the company had four scales that were red tagged, “no fine actions were taken” against Allan Company and “no criminal cases were filed during the period,” Humphreys pointed out.

“Typically, our office takes civil administrative penalties against the companies where there is a repeated problem,” said Humphreys.

What constitutes a “repeated problem” remains unclear, and Humphreys has not responded to requests for clarification from The Lookout.

Next: The City examines options for the future of the center

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