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City approves recycling pact

Council OKs a deal with private contractor facing allegations of fraud regarding the collection of recycled materials.

September 04, 2009|By Christopher Cadelago

CITY HALL — The City Council this week approved an agreement with Burbank Recycling Inc. to operate the city’s recycling center and green waste diversion services, despite the fact that the company is mired in a multimillion-dollar state fraud case.

The five-year agreement is expected to pay Burbank Recycling Inc., a private contractor that sorts and markets recyclables for the city-owned Burbank Recycle Center, about $593,600 annually. Profit-sharing from curbside- collected materials could bring that down to $422,000.

The contract was approached cautiously Tuesday amid allegations that the company bought bales of out-of-state crushed bottles from Phoenix-based Mission Fiber Group Inc., tendered CRV claims and shared the proceeds with Mission Fiber, according to a California Department of Conservation administrative accusation.

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Mission Fiber is suspected of collecting $32.6 million in redemptions over a three-year period ending in 2007, the accusation states. Seeking reimbursement in California for out-of-state containers is a form of fraud because state redemption funds are collected only on in-state beverage sales.

Burbank Recycling Inc. owner Geoffrey Folsom, a well-known member of the business and nonprofit community and a member of the Sustainable Burbank Task Force, deferred questions this week to his attorney, Hal E. Wright, who said no case number and no judge had been assigned in the administration proceedings.

“We’re confident that Burbank Recycling met all of its regulatory requirements,” Wright said.

Still, the council was wary of the accusations.

“I didn’t know about all these charges until [Tuesday] night, so I would be inclined to do a shorter-term contract,” Vice Mayor Anja Reinke said. “The public is going to wonder what we’re doing if we’re doing long-term contracts while all these things are hanging out there.”

The state Department of Conservation will not comment until the matter is resolved, spokesman Mark Oldfield said.

Documents show the department is seeking more than $44 million for 8,815 violations of state codes, including falsified documents, making claims on out-of-state containers and failure to inspect loads.

Burbank Public Works Director Bonnie Teaford assured the council Tuesday that it would have the authority to terminate the contract should Burbank Recycling be found guilty of fraud.

The new provisions of the contract with the city increase services, generate new revenues, reduce green waste hauling impacts and align Burbank Recycling with the city’s Sustainability Action Zero Waste plans, Recycling Coordinator Kreigh Hampel said.

Burbank Recycling has also agreed to invest $292,000 in equipment and improve on-site truck traffic, material storage and facility maintenance.

“We are aware there are some allegations, and we’re certainly going to watch that,” City Atty. Dennis Barlow said. “Allegations doesn’t mean they’re guilty.”


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