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Waste Management Ousted From Chicago’s Recycling Program

Waste Management lost the city’s Blue Cart contract after a BGA investigation revealed how the company charged the city twice for processing materials in recycling bins.

The city has reached a $79.6 million contract with Lakeshore Recycling to handle most of Chicago’s residential recycling program. The contract includes greater oversight on the issue of tagging recycling bins as contaminated.
Madison Hopkins/BGA

CHICAGO — Chicago is throwing its largest recycling contractor to the curb as it works to overhaul a failed program long criticized for having one of the lowest recycling rates in the nation.

Waste Management, Inc. — the largest garbage hauling company in North America — lost its bid to keep the contract after the city’s Department of Streets and Sanitation this week announced a competitor will take over the program.

The move follows a 2018 Better Government Association investigation that found massive problems with the city’s recycling program for single-family homes and small apartment buildings.

The BGA detailed that the city’s recycling rate routinely hovered below 10% and that Waste Management, the top firm handling residential recycling, labeled Blue Carts as contaminated more than 20 times as often as the city’s other collection crews. As a result, the city often paid Waste Management twice for processing the same materials — once to label the bins as contaminated and again when it sent the contents of those recycling bins to its garbage dumps.

Waste Management was the only recycling hauler in the city’s Blue Cart program that also held a city contract to dispose of waste at landfills it owns.

RELATED: As Tons Of Chicago Recycling Go To Dumps, A Private Firm Is Paid Twice

A Waste Management spokeswoman on Tuesday did not return calls for comment prior to publication. In 2018, in response to the BGA investigation, the spokeswoman said financial incentives played no role in the company’s contamination tagging.

“Recycling contamination is an undeniable trend across the country. It is no different here in Chicago,” company spokeswoman Lisa Disbrow said at the time.

Following the BGA investigation, Streets and Sanitation Commissioner John Tully said in an interview that the city would rework the contract to address the contamination problem and other issues.

“There’s enough blame to go around on the way even the city was handling it,” Tully said in 2018.

Since then, the city renewed Waste Management’s contract on a year-to-year basis but last year put the contract up for bid. And on Monday, Tully announced it had reached a $79.6 million contract with Lakeshore Recycling that includes oversight on the issue of tagging recycling bins as contaminated.

“The Department of Streets and Sanitation remains committed to supporting waste diversion efforts,” he said in a news release. “The contract allows for penalties for missed collection and has a greater clarification around contamination. We believe these will help improve recycling rates.”

The new, three-year contract begins in June. Under the deal, Lakeshore will take over four of the six recycling zones in Chicago on the Northwest and South sides. The other two zones, on the North and Southwest sides, will continue to be handled by city Streets and Sanitation haulers.

Lakeshore for years has been handling recycling in one Chicago zone, on the South Side, as part of a “managed competition” of public and private recycling services, a process that started under then-Mayor Rahm Emanuel. The BGA investigation found Lakeshore’s contamination rates were not nearly as high as Waste Management’s.

Under the new contract, Lakeshore — now known as LRS — is required to collect all Blue Carts in its zones with less than 50% contamination. The company will also face penalties for missed collections, according to the city’s news release.

The city also said it expects the results of a comprehensive waste and recycling study, conducted by the Delta Institute, by the end of June. The findings will be used to determine any next steps to improve recycling in Chicago, according to the city news release.

This story was produced by the Better Government Association, a nonprofit news organization based in Chicago.

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