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City Pleased With RecycleBank Pilot

By Sean O’Leary

November 10, 2008

The City of Hartford is testing the effectiveness of a community recycling program designed to help both the city and its residents save money.

A year-long pilot program that began in May with RecycleBank, a four-year-old New York company, serves 4,500 Hartford residents. If it is deemed a success, it could be put in place throughout the city, potentially reducing the $2.4 million the city now spends on waste management.

The program rewards customers who participate by providing them discount coupons good at retailers such as CVS Pharmacy, Petco and Dick’s Sporting Goods.

To measure the amount residents recycle, RecycleBank issues each special bins with a radio frequency identification (RFID) tag. When a resident’s recyclables are dumped into the city’s hauling trucks, the amount is weighed, and the resident receives rewards coupons in proportion to the amount of glass, plastics and papers recycled.

The city stands to benefit as well because it reduces the cost of incinerating its garbage. While the city pays $72 to incinerate one ton of garbage, it gets paid $10 for each ton of recyclables. That means that for every ton of recyclables it pulls out of the incinerated waste stream, it saves $82.

The RecycleBank rewards program is currently in use in 90 cities in 13 states. Five are in Connecticut, including the Mystic section of Stonington and Gales Ferry in Ledyard.

Hartford’s reason for testing the RecycleBank program is simple math, said Marilynn Cruz-Aponte, assistant to the city’s director of public works. The goal is to save money by diverting recyclables from the waste stream, Cruz-Aponte said.

Since the pilot program began in May, participating residents have increased the amount of recyclables they put out to the curb from about seven tons a week to nearly 17 tons. Based on those numbers, the 4,500 pilot participants could save the city almost $43,000 a year.

‘Single-Stream’

The RecycleBank program is the latest effort by city officials to boost the percentage of residents who recycle. It follows a recent conversion to a “single-stream” recycling system that doesn’t require residents to separate paper, glass and plastics.

Cruz-Aponte said the city isn’t sure yet whether it is the single-stream system or the RecycleBank rewards that is most responsible for boosting recycling rates.

“Can you differentiate whether the increase is a pure single-stream function?” she said. “Or does the rewards program have a significant impact? The economy right now is a challenge to people’s pocketbooks, and $5 off or $15 off can mean a lot.”

Mayor Eddie Perez said he believes the program has been well-received. He said the city will decide early next year whether to forge a long-term citywide deal with Recyclebank.

“We’re going to wait for all of the data to come in before we make that decision,” Perez said. Perez noted that it’s a challenge to convince many in Hartford to recycle, particularly the 75 percent who are renters and recycle at lower rates than homeowners.

“We want to see how it works across the city, in the toughest parts of the city to recycle,” Perez added. “We think the rewards program is a good way of show the benefits of recycling to the low-income neighborhoods.”

Chuck Oyler, general manager of RecycleBank New England, said Hartford will make its decision next year with an eye on the city budget. “We like to say that our program isn’t just budget-neutral, it’s budget-positive,” he said.

One of RecycleBank’s top success stories is Wilmington, Del., where the city just completed its first year of citywide implementation following a pilot program that began in 2006.

Success Story

In a statement, Wilmington officials said its diversion rate — the amount of the trash diverted to recycling — is up to 32 percent after the year-long program. The rate had been 2 to 3 percent.

In one year, the city diverted approximately 11,600 tons to recycling from 21,500 resident units.

If Hartford were able to divert that many tons, it would save nearly $1 million, based on its savings rate of $82 per ton.

Wilmington officials calculated that participants saved $870,000 from using rewards from recycling, and the rewards stimulated $3 million in RecycleBank-related purchases.

Oyler said evidence of the program’s success comes in the redemption of rewards.

“Our rewards are redeemed close to 90 percent of the time,” Oyler said. “It’s good for the city and for economic development because it’s very important to us to have local businesses that are willing to accept the rewards.”

RecycleBank’s business plan is to profit from promotional deals with retailers and from sharing the money saved by municipalities.

Newsweek magazine reported that RecycleBank lost about $2.5 million in the quarter ended July 1, suggesting an annual burn rate of $10 million. But company officials said they expect to turn profitable in 2009.

The company has been fueled by more than $40 million in venture capital investment.

Oakleaf Waste, an East Hartford-based waste recycling company, said it does not compete with RecycleBank because it focuses on business-to-business transactions, while RecycleBank works exclusively with municipalities.