By Jorge Casuso

March 16, 2026 -- The City Council last Tuesday authorized a 10-year contract to secure the services of one of "only a handful" of recycling process facilities in the Los Angeles region.

The $7,221,952 contract with Potential Industries, Inc. will "secure capacity and pricing" for a city that generates some 11,500 tons, or 23 million pounds, of recyclable materials a year, according to Public Works.

The contract provides "the uninterrupted, efficient, and safe collection of recyclable materials" at a time when there is a high demand for recycling facilities.

"There are only a handful of recycling facilities in the region, and all nearby municipalities and haulers compete to use the same limited capacity," the City's recycling division informed the Council.

"Because the daily capacity of these facilities is highly regulated and the region continues to expand housing and other development, it is unlikely that new recycling facilities will be established in or near densely populated areas."

As a result, "It is prudent to secure capacity and pricing through a ten-year contract," staff wrote.

The City’s Resource Recovery and Recycling (RRR) Division provides a curbside collection program for solid recyclable materials; organics, such as food scraps and yard waste, and landfill trash, officials said.

RRR then transports the recycling material residents and businesses place in blue recycling containers to a transfer station that, in turn, hauls the materials to a regional recyclable processing facility.

At the facility "the materials are sorted for contamination, baled, and shipped to buyers," staff said. "A recyclable processing facility has the footprint, capacity, equipment, and expertise needed to process and market such materials."

According to Potential Industries' website, the company has five facilities "strategically located throughout Southern California," each with a full-service recycling center with certified scales, trucking, high density balers and loading docks.

In California, recycling facilities, like landfills, "are heavily regulated by the State with stringent environmental compliance requirements," staff wrote in a report to the Council.

These include "a daily allowable maximum tonnage limit that each facility can accept per day," staff said, adding that "the State rarely issues new permits to new recycling facilities" due to the strict regulatory requirements.

Potential Industries, Inc. was one of four companies that submitted proposals to the City, and its qualifications placed it "above all other firms."