Sanford Journal of Public Policy, Vol. 5 No. 1 (Winter 2014), 25–45
County Costs and Funding in North
Carolina’s Electronic Recycling Program
Rachel Leven
North Carolina Senate Bill 887, known as the “Amend Electronics Recycling Law,”
created a new system of funding for electronic recycling programs in 2010. The state’s
Department of Environment and Natural Resources (DENR) and counties expected
that the law’s implementation would eliminate or significantly reduce the cost to counties of recycling electronic materials. However, in North Carolina FY 2011–2012 and
FY 2012–2013, local counties reportedly spent large amounts of money on their electronic recycling programs. Using survey data from 21 counties in North Carolina, this
paper describes the costs experienced by county electronic recycling programs. It also
seeks to determine if there are any faults in the funding system. Finally, in the service
of other electronic waste recycling programs, this paper analyzes the factors in county
demographics and program management that predict high costs. The results suggest
adopting cost-management techniques. The paper finds that a large drop in the price
of CRTs played an important role in county costs. However, it concludes that local
government recycling programs may be able to protect themselves from such market
changes by shopping carefully for their recycling vendors, investing in their collection
infrastructures, and diversifying their customer and material bases.
Background
Electronic waste legislation is growing in the United States. The first
law was enacted less than a decade ago. As of 2013, 25 states, including
North Carolina, have laws addressing the management of discarded electronics. Most of these laws, as well as calls for national legislation, place
manufacturer responsibility at the center of the legislation. Manufacturer
Rachel Leven has researched, written, and spoken about solid waste management and recycling for over a decade. In 2011, she completed a Fulbright research grant on decentralized
waste management in India. Rachel holds a Master of Public Policy from Duke University and a
Bachelor’s Degree from Tufts University.
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Sanford Journal of Public Policy Vol. 5, No. 1 (Winter 2014)
responsibility, also known as extended producer responsibility (EPR),
is based on the philosophy that the companies who make and sell their
equipment should internalize the cost of proper end-of-life management
(Wiesmeth and Häckl 2011). Taken to the extreme, manufacturers could
be forced to pay for the entire cost of disposal or recycling for every TV
they manufacture. They may be able to decrease the costs of recycling
and disposal by making design changes to the product or passing on the
costs to TV consumers (Organisation for Economic Co-operation and
Development 2004).
In 2009, the North Carolina legislature ratified Senate Bill 887 (Session
Law 2010-67). Also known as the “Amend Electronics Recycling Law,” S.
887 banishes electronic waste from landfill disposal. It sets up a funding
system to ensure that manufacturers of electronics sold in the state put
resources into recycling. The law addresses TVs, computers and computer
accessories. Electronic recycling requires some infrastructure and operating costs. However, local counties were reportedly spending unexpectedly
large amounts of money to build and run their electronic recycling programs in North Carolina during FY 2011–2012 and FY 2012–2013.1
Lessons from the cost experience of counties in North Carolina are
valuable to states and communities that are struggling with the rising
costs of their own programs as well as states that are currently considering
enacting recycling legislation.
North Carolina’s E-Scrap Legislation
Chapter 130A of the General Statutes
North Carolina’s Discarded Computer Equipment and Television
Management legislation seeks to protect the environment primarily by
changing the economics of consumer electronic recycling programs. The
statute states that televisions and other discarded consumer products covered by the law (such as computers and computer accessories) “may not
contain any valuable products but should nevertheless be recycled to prevent the release of toxic substances to the environment. (Chapter 130A
§130A-309.130).” In banning electronics from landfills, the law forces
1. Reports are primarily from counties calling the Department of Environment and
Natural Resources with requests for more funding, advice, and general complaints
about the costs of the program.
North Carolina’s Electronic Recycling Program Rachel Leven
27
consumers and local governments to invest in recycling or re-using electronics, even at a cost. The legislation seeks to establish “a shared responsibility among manufacturers, retailers, consumers, and the State (Chapter
130A §130A-309.130).” The law covers computer equipment, such as
printers, keyboards, scanners, and TVs, including devices with a broadcast,
cable or satellite tuner with a viewable screen larger than nine inches. The
law also requires recovery and recycling of products in this category and
was accompanied by amendments to General Statutes 130A-309.10, a list
of materials banned from landfills. Materials that are not included in the
ban are typewriters, servers, Industrial Commercial and Institutional (ICI)
devices and systems, professional workstations, mobile telephones, and
other standalone portable electronics, such as calculators and tablet devices.
The law lays out specific requirements for computer and television
manufacturers. Both computer and television manufacturers are required
to register with the state and place a permanent label on the product identifying the manufacturer. Then, computer manufacturers must commit to
an in-state recycling program, including a mix of direct recycling of one’s
own material, recycling of any brand of electronics and cooperative recycling with other manufacturers. The computer manufacturers do not have
to meet a minimum target for tons of material recycles. Depending on the
type of recycling programs the computer manufacturers sign up for, they
are required to pay different registration and annual renewal fees.
Television manufacturers face stricter regulations. In addition to labeling their products and paying an initial and annual renewal registration
fees, they are required to recycle their market share of televisions sold
in the previous year. The television manufacturers may arrange for independent recyclers to cover their market shares (a number determined
through national statistics). They are also able to form joint plans with
other manufacturers, and materials they recycle may come from a variety
of sources including Goodwill, a non-profit that sells items second hand.
According to internal sources at the Department of Environment and
Natural Resources (DENR), Goodwill is a major contributor of recycled
TVs. The inclusion of this requirement in the law may have led county
programs to expect that all of their TVs recycling would be paid for by
manufacturers seeking to meet their state targets. As this paper will elaborate, this is not the reality.
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Sanford Journal of Public Policy Vol. 5, No. 1 (Winter 2014)
The fees paid by computer and TV manufacturers are returned to the
state. The law allows DENR to use some of the fee-revenue for its administration costs related to the electronic recycling program.2 The rest of
the funds collected are delegated to the Electronic Management Fund.
In 2012, DENR’s distribution fund totaled $600,000. This money was
distributed based on population to counties that have at least initiated
electronic collection and used a certified processor. Manufacturers that
annually sell 1,000 items or less are exempt from fees.3
If working as intended the recycling system in North Carolina should
flow as follows (see Figure 1):
• Fees are paid to DENR, who then invests these funds in
administering and supporting recycling across the state.
• Manufacturers, counties and other actors, such as Goodwill,
collect electronic materials from residents and businesses.
• TV manufacturers collect a prescribed minimum of materials
through direct take-back programs or, more frequently, pay
independent recyclers and middlemen to find and recycle these
materials for them.
Observations on E-Scrap Legislation
Implementation in North Carolina
There are a number of potential and perceived patterns in the flow
of funds and materials through the North Carolina electronic recycling
system.4 Cathode Ray Tubes (CRT) are the primary pattern of interest
for this paper. CRTs, glass found in old TV screens, are included in North
Carolina’s landfill ban. While CRTs can technically be recycled, their
market demand is currently low and declining. It is possible that this market trend was not fully factored into contracts between TV manufacturers
2. The law allows all of the fees paid by television manufacturers and 10 percent of the
fees paid by computer manufacturers to go towards the Department of Environment
and Natural Resources’s administration costs.
3. See http://www.ncleg.net/Sessions/2009/Bills/Senate/HTML/S887v6.html
4. This assertion is based on my extensive literature review and conversations with
DENR’s division of Environmental Assistance and Customer Service, who overseas electronic recycling in partnership with the vision of Solid Waste. The extended
literature review can be found at http://dukespace.lib.duke.edu/dspace/bitstream/
handle/10161/6660/RLeven_MP.pdf ?sequence=1
North Carolina’s Electronic Recycling Program Rachel Leven
29
Figure 1: North Carolina’s E-Scrap Legislation—Flowchart
This chart is based on the Solid Waste Management Act of 2007 (S.L. 2007-550, SB 1492 Part 2E,
Article 9, Chapter 130A of the General Statutes)
and recyclers in 2010 and 2011. If this is the case, the additional cost for
recycling CRTs will fall to North Carolina counties who are laden with
unsellable and non-disposable CRT materials. (For trend studies in CRT
supply see Lee, Cooper et al. 2010 and Walker 2009.)
A handful of counties in North Carolina initiated electronic recycling
programs prior to the change in law, some as early as 2003, while others
are just now implementing their programs. New electronic recycling programs are likely to attract a lot of old TVs containing CRTs (Lee, Cooper
et al. 2010). It is also possible, though less likely, that counties receive and
send electronics for recycling that are not covered by the legislation and,
therefore, are also not covered by manufacturer funds.
Material value is a critical component of any recycling program
(Lacoste 2007). If a material has a positive recycling or reuse value, recyclers will often pay the county or other material generators to acquire this
“waste.” The price depends on the material’s quality and quantity. Counties
that do not protect their valuable materials, such as computers, and/or collect little valuable materials may receive less revenue. Some counties may
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Sanford Journal of Public Policy Vol. 5, No. 1 (Winter 2014)
have to incur material transportation costs and other expenses typically
covered by recycling vendors.
North Carolina is geographically diverse, with its population concentrated in the middle corridor of the state. The law does not require recycling vendors to cover any particular area of the state. Therefore, recyclers
are likely to concentrate on certain counties based on geography or material. Recyclers will provide these counties with free services or even a small
profit, while charging other, less profitable, counties.
Although electronic waste is banned across the state, each county is
left to implement its electronic recycling program in the way it sees fit.
Management practices of counties can affect capital costs as well as the revenue potential from electronic material. For example, a county that carefully
packages its electronics prior to transferring the materials to a recycler may
be offered more money (or be charged less for negative-value materials).
Analytical Goals
As the amount of electronic materials entering our waste stream continues to increase, this paper examines the cost and management structures
of county electronic recycling programs in North Carolina to determine
if there are high costs in the system and how those costs can be managed
or avoided in the future. This analysis seeks to address these questions in
three parts:
1. Approximately how high are the costs? Are counties’ complaints about high costs a long-term concern? Or, are they
over-reacting to small unexpected and temporary costs?
2. What (or where) is the disparity in costs occurring? Are there
common factors that predict the cost of a program such as the
number of cities or wealth of population? Is the volume of
CRTs the primary driver of high costs or do identifiable management practices also play an important role?
3. Assuming high costs are pressing concerns, where does the
solution reside? Should counties change their management
practices? Should DENR’s electronics fund be distributed
differently? Should manufacturers be required to contribute
more? Are changes to the legislation necessary?
North Carolina’s Electronic Recycling Program Rachel Leven
31
This analysis does not seek to argue whether the electronic waste program is good or bad. Nor does it aim to value non-monetary benefits and
costs. Instead, this paper focuses on analyzing trends in program management, such as customer base and material processing techniques, as well
as budgetary expenses.
Methodology
Data sources
The data used in this analysis includes primary information collected
through surveys and follow-up interviews with 21 counties. To analyze
the survey results and further examine trends across the state, this article
draws on annual solid waste reports filed by each county, as well as 2012
reports filed by manufacturers of computers and electronics. This analysis
also draws on information collected during meetings with DENR staff,
recyclers and county program managers. Correlation is used as a demonstration of trends. However, tests for significance of correlation were not
carried out, as the number of sample counties was too small.
County survey overview
The survey aimed to build an accurate picture of county financing and
material management. The primary method for analysis is side-by-side
comparisons of county programs to recognize unusual costs as well as
management, geographical and/or other program characteristics that lead
to budget stress.
The survey questions collected as much detail as possible about the
revenue costs and management of county electronic waste programs.
Specifically, the survey gathered the following information about county
electronic recycling programs:
• Budget allocated to the program
• Capital costs for building the program
• Operating costs for running the program
• Revenues and costs from selling or transferring electronic material
to recyclers
• Management practices
• The quantity and type of material collected
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Sanford Journal of Public Policy Vol. 5, No. 1 (Winter 2014)
Most counties did not record specific information about the various
programs within their budget. Therefore, the accuracy of the survey relied
on the careful participation of interviewees.5
Analysis
County participants
In late 2012, representatives from solid waste departments in all of
North Carolina’s 100 counties received the survey. Twenty-one counties,
listed in the table below, returned the survey. Follow-up with counties
consisted of phone calls averaging 10 minutes each. The response rate for
this survey was higher than expected, considering its voluntary nature.
The first goal in distributing this survey was to collect a diverse list of
counties based on predictors of program structure and success (listed in
the following table). There is a good representation in the age of county
programs. Nine programs started between 2003 and 2005, seven programs started between 2010 and 2011, and five started between 2005 and
2008. The older programs tend to serve larger county populations with
high urban density. Thirteen of the participating counties are located in
the central region of North Carolina. There are four Western and four
Coastal region programs. Eight of the top 10 most populous counties
surveyed are located in the central region, reflecting state patterns. Wake
and Mecklenburg, which are included in the survey, have the largest populations in the state and two out of the six oldest electronic recycling programs in the survey. It is possible that some of the answers these counties
provided are not representative of the state as a whole. However, given the
newness of this field, exploring the factors that lead to high or low costs
in these counties can provide a base for other counties and states to begin
examining their own programs.
Trends in materials received
Population
The more populous a county, the more material the county’s programs receive. Figure 3 below confirms that tons of TVs collected is
closely related to population. Figure 4 shows there is a similar relationship between urban density and TV tons (Wake and Mecklenburg were
removed for scale in both figures).
5. For the full survey see http://bit.ly/17nbuV5 (Appendix B)
North Carolina’s Electronic Recycling Program Rachel Leven
33
Figure 2: Sample Counties
Population
Density
First Year
Electronics
Program
appears in
State Record
Sector
Served by
Recycling
Program
County
Region
% of State
Population
Alamance
Central
1.59%
356.5
2010
Residential
Guilford
Central
2.29%
418.8
2005
Residential
Lee
Central
0.61%
227.0
2003
Residential
Mecklenburg
Central
9.78%
1,755.5
2003
Residential;
Commercial
Moore
Central
0.93%
126.5
2010
Residential
Nash
Central
1.01%
177.3
2007
Residential
Northampton
Central
0.23%
41.2
2010
n/a
Orange
Central
1.41%
336.2
2003
Residential;
Commercial
Stokes
Central
0.49%
105.6
2011
Residential;
Commercial
Vance
Central
0.47%
179.2
2011
Residential
Wake
Central
8.03%
969.4
2003
Residential;
Commercial;
Industrial
Gaston
Central/
North
2.14%
578.8
2003
Residential;
Commercial
Madison
Central/
North
0.22%
46.2
2003
Residential
Brunswick
Coastal
1.14%
126.8
2005
Residential;
Commercial
Carteret
Coastal
0.70%
131.3
2007
Residential
Chowan
Coastal
0.15%
85.8
2007
Residential;
Commercial
Currituck
Coastal
0.25%
89.9
2010
Residential
Burke
Western
0.94%
179.3
2011
Residential;
Commercial
Rutherford
Western
0.70%
120.2
2006
Residential
Transylvania
Western
0.34%
87.4
2005
Residential;
Commercial
Watauga
Western
0.53%
163.4
2008
Residential
(Persons/sq
mile, 2010)
Population data from http://quickfacts.census.gov
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Sanford Journal of Public Policy Vol. 5, No. 1 (Winter 2014)
Figure 3: Tons of TVs vs Population
Figure 4: Tons of TVs and Population Density
Figure 5 shows that the relationship between county population
and the portion of TVs in a recycling program is weak, indicating that
population may be a reasonable metric to distribute state funds. Survey
respondents reported the percentage of TVs, computers and computer
equipment, as well as other electronic materials present in their recycling
programs.
North Carolina’s Electronic Recycling Program Rachel Leven
35
Figure 5: TVs as a % of All Materials in Electronic Recycling Program vs Population
Program age
There was little association between the start date of a program and the
number of TVs and other materials collected as a percent of all electronic
materials. The analysis relied on self-reported information from the survey
and divided counties by age of program as seen and detailed in Figure 6 below.
Figure 6: Age and Material
TVs (%)
CE (%)
Other (%)
CRTs (%)
Number of
Programs
Old Programs
(existed in 2003)
60
29
12
78
6
Middle-Age Programs
(started between 2005–08)
63
24
13
83
8
New Programs
(started between 2010–11)
63
29
10
77
7
Program Start Date
According to the survey respondents, older programs receive only
slightly fewer TVs as a percentage of all electronic materials. While the
number of CRTs is on a downward trend overall, there appears to be a
spike in CRTs after a number of years and a high leveling point. It is a
common belief that as flat screens replace old TVs, public programs will
receive fewer CRTs. However, it appears that this trend is slow. Counties
should plan to receive CRTs for a decade or more, rather than hoping to
wait out the tide for a few years.
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Sanford Journal of Public Policy Vol. 5, No. 1 (Winter 2014)
County resident income
The average income of a county’s population appeared to be a stronger
predictor of the type of material counties received than either population or program age. Although causality and statistical significance is not
tested in this study, Figure 8 demonstrates that per capita income in the
past 12 months is more highly correlated with the percent of CRTs and
TVs than are any of the other variables mentioned above.6 When the
three counties that reported 50 percent or fewer CRTs are removed, the
trends between county income and material become stronger.
Wake and Guilford counties are not included in the income correlation. Wake and Guilford do not manage the solid waste programs in the
town of Cary (Wake) and the town of Greensboro (Guilford). Since these
districts cannot be removed from the measure of county income, it is inaccurate to use county income data for Wake and Guilford. When Wake
and Guilford are removed from the other measures in Figure 7, the values
of correlation coefficients generally decrease. One exception is that the
correlation between population metrics and CRTs received increases to
0.22 for population and 0.15 for population density as noted in brackets.
Figure 7: Correlations of Wealth with Material Composite
CRTs as a
Portion of TVs
TVs as a
Portion of All Material
0.38
-0.37
Population %
0.15 (0.22)
-0.16
Population Density
0.13 (0.15)
-0.13
-0.15
0.08
County Income
Program Age
Parentheses indicate correlation with Wake and Guilford counties removed.
Interestingly, the correlation for CRTs versus non-CRTs is positive,
indicating that higher income counties receive more CRTs as a percent
of all TV material. However, given the narrow margins (most points fall
between 70 and 100 percent) in which this portion is considered, the trend
is not informative for practical purposes. Figure 8 below shows this narrow
6. Per capita money income in the past 12 months (2011 dollars), 2007-2011 according to US Census Bureau, American Community Survey, 5-Year Estimates. http://
quickfacts.census.gov/qfd/states/37000.html
North Carolina’s Electronic Recycling Program Rachel Leven
37
Figure 8: CRT-TVs and County Wealth
Figure 9: TVs and County Wealth
trend line. In contrast, Figure 9 shows a stronger relationship between
income and TVs as a percent of all material. The lower income counties
tend to collect a higher portion of TVs in their programs.
Customer base
While customer base, the population providing material, and the percent of TVs, computers and other materials are not related in any meaningful way, there is a large correlation (-0.46) between the portion of CRTs
a program received and its customer base. This indicates that counties will
not be able to increase the number of computers they receive by expanding
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Sanford Journal of Public Policy Vol. 5, No. 1 (Winter 2014)
their collection to commercial businesses. However, counties may be able
to decrease the percent of CRTs they receive. As Figure 10 demonstrates,
with each additional customer added, the portion of CRTs (as percent of
all TVs) tended to decrease. Those counties that received material from
residents, non-profits, government, and businesses on average received 26
percent fewer CRTs (as a portion of all TVs) than counties that collected
material only from residents or residents and non-profits/government.
Figure 10: CRT-TVs and Customers
Collected:
% CRTs
Number of
Counties
+0
+1
+2
+3
+4
Only
Residents
Residents &
Non-Profits
or Local
Government
Residents &
Non-Profits &
Government
or Business
Residents &
Non-Profits &
Government*
& Business
Residents &
Non-Profits &
Government
& Business &
Schools
92%
97%
82%
69%
77%
2
3
3
6
7
*One of the counties collected from schools instead of government. Without this county, % CRT is 64.
This type of analysis is possible because counties follow a similar pattern in their customer base. All counties receive materials from residents.
Some counties receive materials from non-profits or local government.
Following that, all counties with three customers receive materials from
residents and non-profits as well as local government or commercial
businesses.
As noted in Figure 10, adding one customer category increases the
portion of CRTs when the customer is local government or non-profits.
When businesses, residents and non-profits are added, the proportion of
CRTs drops. When counties serve all four of these customers, the proportion of CRTs decreases by more than 12 percent. Finally, when schools are
included as a fifth customer, the proportion of CRTs increases once again.
In fact, those counties that received material from schools, in addition to
all other customers, had 13 percent more CRTs than those counties that
received material from only three sources and no schools.
North Carolina’s Electronic Recycling Program Rachel Leven
39
Figure 11: Changes in Vendor Pricing FY 2011–2012
7
33%
3
21%
14
67%
11
79%
While not conclusive, this trend leads to a hypothesis that the portion
of CRTs drops the most when businesses are served, followed by government. It is more difficult to make a statement about non-profits given the
division of the customers. However, it is clear that counties serving schools
are likely to have a higher portion of CRTs. It is relevant to note that county
per capita income, as measured above, is also highly correlated with the
customer base (-0.41). This means that the wealthier a county is, the fewer
customers it tends to serve. This observation might play a role in the positive
correlation between CRTs and county income mentioned previously.
Trends in vendor relationships
In FY 2011–2012, county-vendor pricing and contracts went through
a great deal of changes. Most of the counties surveyed experienced a
change in contract pricing during the year. All but one change involved
an increase in the charges and/or a decrease of services provided by the
recycler.7 Prior to 2012, many counties received free pick-up and equipment from recyclers. Common “fee” increases consisted of charges for such
previously free services.
However, only five out of the 14 counties that experienced price
changes also changed their vendors. All nine of the counties that did not
change vendors accepted a price increase and many of those nine noted in
the survey that they were hoping to change vendors soon. Three counties
that changed or shopped for vendors (tried a new company but returned
to the original vendor) also experienced cost increases in their programs.
While counties should be changing to cheaper processors, many were
locked into contracts or unable to find acceptable options available on
7. The exception was a county whose costs decreased for that year.
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Sanford Journal of Public Policy Vol. 5, No. 1 (Winter 2014)
the market within the FY 2011–2012. Two counties reported that they
are currently searching for new options and one county changed vendors
during FY 2012–2013. It should be noted that a county’s ability to switch
to a more affordable certified vendor will be hampered by a worsening
CRT market that affects all processors. The best that a county can hope
or plan for is to find a vendor that has support from TV manufacturers to
subsidize costs as part of their market share recycling obligations.
Out of a total of eight recyclers serving the 21 counties, Synergy,
Creative Recycling Systems, and E-Cycle Secure captured 76 percent of
all contracts (formal and informal) in the survey. All of Synergy’s customers experienced a fee increase. Synergy did not receive any manufacturer
funding, so it is reasonable to expect that it would increase its fees.
Creative and E-Cycle Secure customers also experienced price
increases. However, unlike Synergy, both Creative and E-Cycle Secure
received the majority of TV manufacturer funding (by pounds recycled).
This indicates that these companies were recycling more TVs overall than
covered by their agreements with manufacturers, or that the companies
charged manufacturers too little for recycling. There is no law that restricts
recyclers from charging counties an additional amount over the manufacturer’s price. Recyclers should not charge counties in a competitive market.
However, the recyclers may charge the county if the recycler’s costs are not
fully covered by manufacturer funds or if the market is not competitive.
(For example, a county may have limited knowledge or access to recyclers.)
Both of these forces are likely at work in North Carolina.
In FY 2011–2012, TV manufacturers under-purchased recycling tonnage and were likely charged less than they should have been by recyclers.8
It is likely that this situation produced a temporary shortage of funded
recycling and limited county options. However, even if manufacturer
funding reaches the correct levels, survey responses show that counties
are not able to jump quickly from one recycler to another, even when
they experience price increases. If counties are unable to connect with the
recyclers who receive manufacturer money, they will not be able to use
competition to their advantage.
8. Sourced from Internal DENR reporting.
North Carolina’s Electronic Recycling Program Rachel Leven
41
Figure 12: Cost per Ton—Summary
Capital Operational
Non-zero
$(0.17)
$(0.10)
Min*
Staff
Vendor
Net
Total Revenue State Revenue
Outreach Cost
**
Revenue No Staff
$(11)
$(0.47)
$(1)
$3
$22
$(365)
Max
$(43)
$(305)
$(1,286)
$(10)
$(344)
$50
$155
$116
Average
$(11)
$(41)
$(223)
$(2)
$(54)
$22
$54
$(24)
Parentheses indicate costs; revenues are provided without parentheses. *All costs and
revenues start at zero; average includes zero. **Only four counties received vendor revenues.
County costs
Costs summary
The survey asked county recycling program managers about their programs’ costs, including fixed costs such as staff wages and time spent working on electronics. Counties often do not break out the actual distribution
of fixed costs by recycling or solid waste programs. For this reason, the
data collected by the survey should be taken as a rough reflection, rather
than an absolute picture, of a county’s budget.
As seen in Figure 12, there was a wide range of costs, with one county
spending as little as $1 per ton on their electronic recycling and another
spending as much as $344. Since staff costs tended to be the least reliable
and the highest cost point during survey follow-ups, these costs are not
included in the analysis of net costs and revenue. Two counties reported
charging residents a drop-off fee for electronics. This occurrence was not
included in their revenue as revenue was defined as money entering in
from outside the county.
Capital costs tended to be very low. Of the four counties that reported
no capital costs, two programs reported a history of full-service provision, including pick-up and loading from the vendor. Another county
reported repurposing old equipment at no cost. And, finally, one program
had already surpassed the timeframe for straight-line depreciation. The
two counties reporting free, full-service contracts with their vendors also
reported $0 in operational costs.
In fact, many counties were able to avoid investing heavily in capital
and operational costs prior to FY 2012–2013 because their recycling vendors provided these services free of charge. In FY 2011–2012, all counties
received a minimum of pick-up service from their recycling vendors. Most
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Sanford Journal of Public Policy Vol. 5, No. 1 (Winter 2014)
counties also received basic supplies such as shrink-wrap and pallets. Only
three out of the 21 counties did not report receiving supplies from their
vendors. Meanwhile, only four counties actually incurred vendor charges
during the fiscal year. A common complaint from counties was that vendors were no longer providing basic services such as transportation, supplies and loading free of charge in FY 2012–2013. It seems that vendors
used these services as a platform to charge counties on a per pound basis
for TVs. It is important to note that when vendors added fees for some
material in FY 2012–2013 they generally also started offering revenue.
However, since most counties have a majority of TVs and CRTs in their
systems, these revenues are not making a large impact.
Only four counties received revenue from their vendors, at an average
of $22 per ton. However, all but one county in the survey received state
electronic funds and many reported spending only a small portion of the
funds in FY 2011–2012. For those that saved their FY 2011–2012 funding, this money proved to be extremely valuable in FY 2012–2013, as they
were able to use these funds to pay the new vendor fees. In the table above,
the tendency of counties to save state funds led many counties to have net
revenue for FY 2011–2012. (Twelve of the 21 counties experienced net
revenue in their programs when staff costs were not included.)
Cost and vendor relations
It is clear that counties incurred higher costs in FY 2012–2013 than
in FY 2011–2012. However, it seems important that counties consider
these costs in terms of the investments they have made in their programs.
Three of the five counties (Brunswick, Orange, and Wake) that made the
largest absolute investments in capital costs also received vendor revenue
at an average of $0.85 for every dollar spent in capital. These counties all
began their electronic recycling programs before 2006; however, the age
of programs does not appear to be a good predictor of per ton capital
investment.
Counties reporting no changes in their vendor relationships also
tended to have a higher cost per ton in FY 2011–2012. Even if we remove
the four counties that received revenue from vendors, the five remaining
counties that did not experience a price change spent an average of $90
per ton without staff costs. On the other hand, the 12 counties that experienced an increase in vendor fees show an average of $11 per ton in net
North Carolina’s Electronic Recycling Program Rachel Leven
43
revenue derived from state funds. These observations indicate that money
invested in an electronic program at present might put counties in a better
position to negotiate with their vendor in the future.
Further Observations on Management Practices
About half the respondents reported that non-county electronic recycling programs were operating in their counties. The majority of those
counties also provide residents with information about these private collection opportunities. This does not seem to predict the type of material
that the counties receive or the cost of the program.
Twelve counties also report receiving scavenged material in their electronics programs. Those counties with scavenged material were 19 percent
more likely to experience a change in prices from their vendors between
FY 2011–2012 and FY 2012–2013. In addition, one quarter of these
counties have faced penalization by their vendors specifically for supplying poor quality materials.
Conclusion
Analyzing trends in material receipt and vendor relationship alongside
cost data brings to light a number of important trends. First, it is clear
that counties are experiencing unanticipated costs in the form of vendor
per pound per material fees. These costs are justified by vendors in part
through charges for previously free services and as a reaction to the high
cost of recycling CRTs. However, the level of capital investment counties
made in their electronic programs prior to FY 2012–2013 appears to have
affected their vendor relationships. Counties that use their own labor and
equipment might expect better relationships with their vendors in future.
If more money is funneled into the system by TV manufacturer purchases, costs to counties may decline. However, it is unlikely that counties
will be able to return to the cost-free scenario experienced prior to 2012.
Counties can make sure they are getting the best deal possible by shopping for more vendors and noting where else vendors may be collecting
material, as well as how much manufacturer funding they have received.
Given that many counties in the survey were not using a vendor with
backing from a manufacturer, North Carolina and states with similar programs should make sure that a marketplace for purchased TV tonnage is
available and county programs have easy access.
44
Sanford Journal of Public Policy Vol. 5, No. 1 (Winter 2014)
Unlike in FY 2011–2012, material type will be a critical component
to county costs in FY 2012–2013 and will likely remain so. Strategies that
counties can use to increase and secure the quality of material include
increasing the number of customers served while staying aware of the
potential for CRTs to increase with the adoption of schools as customers.
Counties can also invest in infrastructure and outreach to minimize the
receipt of scavenged material.
CRTs will continue to be expensive to recycle, and it is likely that they
will remain in the system for many years to come. The law does not force
recyclers to take into account the full cost of recycling in their contracts
with manufacturers. Once recyclers are locked into contracts for a certain
amount of tonnage they will either have to bear those costs themselves or
look for other sources of income. Broken down into a simple example, a
recycler may enter a pre-contract with a manufacturer, agreeing to process
one TV for $1. If a TV actually costs $2 to process, the recycler can turn
around and charge a county another $1 or more for processing. If there is
low competition in the recycling market, counties lacking a competitive
edge in their material and vendor relationships will continue to pay fees.
Finally, while population appears to be a fair metric for distributing
funds, DENR should examine the role that the county’s overall wealth
(measured by income per capita) plays in the type of material received. If
county wealth and TV output are positively correlated, there may be other
funding mechanisms or vendor matching that can be put in place to assist
vulnerable programs.
As the US embraces electronic waste regulation and the concept of
extended producer responsibility, market structure and material trends
should be a critical consideration of any legislation. Casual observers, and
even waste and recycling practitioners, tend to see dollar signs in any kind
of electronic material. However, the diversity and quantity of products
available and the speed of changes in product design can lead to instability
in the recycling market, as was the case for CRTs throughout this study.
Local recycling programs that invest in building infrastructure, as well
as building up the source of their incoming material, should be prepared
when a market spike occurs again.
North Carolina’s Electronic Recycling Program Rachel Leven
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