junkyards

So which commodities are inflated?
Urban economics: Where does ordinary garbage fit in? The Secondary Materials Industry Primer: in the U.S.A. and in Connecticut
"Junk Yards" - a specialty of "About Weston" from back in the late 1960's in NYC! An this is an item of news even in Whidbey Island! MARKET FORCES NEWS...terror link in CT?

Missing Appliances Puzzle Sanitation Officials
NYTIMES
By WILLIAM K. RASHBAUM
December 14, 2010

Over the last several months, 22,741 New Yorkers contacted the city’s Department of Sanitation and arranged for the pickup of refrigerators, air-conditioners and freezers. In more than 11,000 instances, the machines vanished before sanitation workers arrived in their white trucks to pick them up.

Who, then, is stealing the household appliances of New York City?

Perhaps it is not the most pressing question facing city authorities, but it is something of a mystery nonetheless. The appliances did not develop legs and walk away, and they did not simply disappear.

Scavengers, to be sure, abound in New York, especially during tough economic times. But the sheer magnitude of the thefts — 11,528 appliances, to be precise — over a relatively brief period suggests to some in city government and the recycling industry that a more organized enterprise may be at work as well.

Deepening the mystery, these were neither the latest Sub Zero behemoths, sleek Bosch nor stylish retro Smeg refrigerators. They were garbage, quite literally — discarded appliances left at the curb for pickup by the Sanitation Department.

And while the value of one discarded appliance may seem marginal at best, in the scrap industry, the fluctuations of commodity prices and volume add up to real money.

Indeed, the big loser in what might be called New York’s Appliances Caper appears to be a multinational recycling conglomerate, a subsidiary of which has a large city contract to recycle the hundreds of thousands of tons of metal, glass and plastic generated each year by New Yorkers, including bulk metal, like appliances.

The subsidiary, Sims Municipal Recycling of New York L.L.C., estimates that the thefts, along with schemes involving redeemable bottles, are costing the company $2 million to $4 million a year.

Behind those losses, some in the industry — by some accounts an $85 billion annual business — see the hand of organized crime, although no one can point to hard evidence. New York’s enduring and resourceful mob families have long played a role in both the recycling and scrap industries and have a knack for turning up where the money is.

The mob’s longstanding involvement in the scrap industry, which had diminished with the decline of organized crime, has seen something of a resurgence in recent years, said George Khouzami, the coordinating supervisor for the organized crime branch in the New York office of the Federal Bureau of Investigation.

At the same time, the urban hunter-gatherer is far from a new, or rare, phenomenon, and scavenging in New York is quite likely as old as the municipality itself, where the wealthy have a way of leaving a bountiful trail of usable, if not salable, detritus in their wake. And as the economy has deteriorated, more and more people — not just the homeless — tend to look to scavenging to make a few extra dollars.

“It’s not just the individual entrepreneur anymore; it’s now organized entrepreneurs,” said Robert Lange, the director of the Sanitation Department’s Bureau of Waste Prevention, Reuse and Recycling, which negotiated the contract with Sims.

While it was only in July that the department began keeping records on the number of appliances that disappeared from curbside, Sims began feeling the bite a little more than two years ago, said the general manager of the company’s municipal recycling division, Thomas Outerbridge. That was shortly after the company, which had been handling the city’s metal, glass and plastic recyclables since 2002, signed its current 23-year contract, worth roughly $1.5 billion. Mr. Outerbridge said the company began to see a significant drop-off in the volume of materials the Sanitation Department was picking up and dropping off at its two facilities.

With seasonal fluctuations, the department’s recycling trucks had been delivering roughly 20,000 tons of plastic, glass and metal each month to Sims’s sorting facilities. But the company has seen that decline by 1,000 to 1,500 tons a month.

“Whether it’s attributed to scavenging activity, an individual is rarely going to go out and pick up bulky metal,” Mr. Outerbridge said. “That’s not a guy with a stick over his shoulder and a bag of cans.”

To track thefts, sanitation officials used online requests and calls to the city’s 311 hot line for the agency to remove chlorofluorocarbons from refrigerators, freezers, air-conditioners, water coolers and dehumidifiers. The removal of the toxic gas is required by Environmental Protection Agency regulations, and specially trained sanitation crews respond to the requests, draw the materials out of the appliances and leave them for removal by the department’s regular recycling pickup.

A task force in the Department of Sanitation Police that focuses on crimes like illegal dumping and the thefts of recyclables has also seen a significant increase in activity on the streets, where it plays cat and mouse with a constant stream of determined thieves, said Inspector Robert D’Angelo, who leads the task force.

Driving vehicles ranging from personal cars and rented trucks to vans that look as if they themselves are a tank of gas away from the scrapyard, thieves who live by the Sanitation Department’s recycling pickup schedules, listed on the agency’s Web site, cruise the city’s streets the night before the big white trucks make their rounds.

In response, the officers have stepped up their enforcement, Inspector D’Angelo said, and while the theft of curbside recyclables warrants only a summons, the sanitation officers impound the vehicles and their cargo — frequently a jumbled load of refrigerators, air-conditioners, Venetian blinds, office partitions and stoves.

This year through Dec. 1, the task force has seized more than 270 vehicles, according to records provided by the department. But the small force does not have the staffing or resources either to track the thieves to the scrapyards where they sell their haul or to determine whether there are connections among any of the people.

But on most nights, the officers move through the city neighborhoods in small teams, working in plain clothes and unmarked cars, circling block after block in the areas they know provide good hunting for their targets, lying in wait and then pouncing, with lights and sirens, when they see someone remove material from curbside, which under law belongs to the city.

On a recent night in Bensonhurst, Brooklyn, they grabbed a man driving a ragged Dodge van packed with scrap — what looked like the contents of two messy garages crammed into the back of a dilapidated van with Pennsylvania plates.

The driver, a squat bedraggled-looking man in jeans and a blue shirt with a blue bandana covering his head, stood looking defeated as the two officers, Michael Bristol and Ed Burke, surveyed the van and its contents.

“This guy has been out here before,” said Officer Burke, nodding his head towards the open back doors of the van and adding, “It’s a nice load.”

Investigators Pursue Possible Connecticut Link To Failed Times Square Bombing
By DAVE ALTIMARI Hartford Courant
May 3, 2010

Investigators pursuing a possible Connecticut link to the failed bombing in Times Square have sought the digital images of at least one person who sources said is the last known owner of the license plate found on the vehicle used to carry the homemade bomb.

The Connecticut license plate found on the Nissan Pathfinder that contained a potentially lethal package of gasoline-filled cans, dozens of powerful firecrackers, three propane tanks, two alarm clocks, wires and a 70-pound metal gun box holding bags that could contain fertilizer belongs to a Ford F-150 truck registered in the Bridgeport area, sources said.

Sources said that investigators asked the Connecticut Department of Motor Vehicles for license images of the person or persons who owned that truck. They have traced the pickup to Kramer's Used Auto Parts Inc., a Stratford junkyard.

On Sunday, FBI agents and state police descended on Kramer's but declined to say what they were looking for. Representatives of Kramer's Used Auto Parts, including its owner, M. Wayne LeBlanc, could not be reached for comment.

Meanwhile, New York City Police Commissioner Raymond Kelly said Sunday that video surveillance cameras showed a man, described as in his 40s, looking back in the direction of the SUV. Kelly said that in the video, the man also was seen shedding a dark shirt, revealing a red one underneath. Kelly described the man's demeanor as "furtive."

It is unclear if the request for the digital images of the Connecticut owner or owners has a direct connection to the man described by Kelly in the video surveillance tape, but what is clear is that evidence has led authorities to the Bridgeport area once again.

The U.S. Department of Homeland Security has always kept an eye on the Bridgeport area because of its proximity to New York and a minor connection to the terrorist hijackers who attacked the World Trade Center in 2001. Four of the hijackers stayed for four days at the Fairfield Motor Inn, according to the 9/11 congressional report. They met with a man named Eyad M. Alrababah, a Jordanian who lived in Bridgeport at the time, who was charged with providing false identification for at least 50 undocumented immigrants, the report said.

The Bridgeport office of the DMV also was the center of an illegal licensing operation that drew the interest of homeland security officials because there were hundreds of phony licenses issued. A task force was established to track down every license issued out of the Bridgeport and Norwalk offices of the state DMV.

Federal officials sought the assistance of Connecticut's auto theft task force Sunday in trying to decipher who owned the Ford truck and whether the Pathfinder also could be connected to Connecticut, sources said.

Sources said that whoever left the Pathfinder in Times Square tried to make it difficult to trace the truck by scratching off the vehicle identification number inside the car. Kelly said that the license plate found on the Pathfinder had not been reported stolen.

Police have identified the registered owner of the Pathfinder and were looking to interview him. Police also were searching more video, believed to be in the possession of a Pennsylvania tourist, of the man in the alley.

Connecticut Gov. M. Jodi Rell said in a statement Sunday: "It is a miracle no one was hurt but the incident had the potential for great tragedy. … The FBI and the Joint Terrorism Task Force are the lead investigators and our Department of Homeland Security and the Connecticut State Police are cooperating and working with them."

Stratford Mayor John Harkins said Sunday that Stratford police were also assisting federal and New York investigators but that he knew no details of the case.

The Pathfinder was inspected by police after they were alerted by two street vendors about 6:30 p.m. Saturday. The SUV was parked on one of the prime blocks for Broadway shows. Thousands of tourists were cleared from the streets for 10 hours while the bomb was dismantled. No one was injured.

"If this had detonated, in my judgment, it would have caused casualties," Kelly said. "I'm told the vehicle itself would have at least been cut in half."

New York City Mayor Michael Bloomberg called the explosive device "amateurish" but potentially deadly, noting: "We are very lucky."

"We avoided what could have been a very deadly event," Bloomberg said. "It certainly could have exploded and had a pretty big fire and a decent amount of explosive impact."

Duane Jackson, a 58-year-old handbag vendor from Buchanan, N.Y., said that he noticed the car and wondered who had left it there.

"That was my first thought: Who sat this car here?" Jackson said Sunday.

Jackson said he looked in the car and saw keys in the ignition with 19 or 20 keys on a ring. He said he alerted a passing mounted police officer. They were looking in the car "when the smoke started coming out and then we heard the little pop pop pop like firecrackers going out and that's when everybody scattered and ran back," he said.

Heavily armed police and emergency vehicles shut down the city's busiest streets, choked with taxis and people.

No suspects were in custody, although Kelly said a surveillance video showed the car being driven west on 45th Street before it parked between Seventh and Eighth avenues. Police were looking for more video from office buildings that weren't open at the time.

The SUV was towed early Sunday to a forensics lab in Queens, where it was being "thoroughly checked for prints, hairs and fibers," Browne said Sunday. Homeland Security Secretary Janet Napolitano said that fingerprints had been recovered from the vehicle.

Courant staff writer Ken Byron and Fox 61 reporter John Charlton contributed to this story. Los Angeles Times and Associated Press reports are included.

Visit courant.com/carbomb for more coverage of the car bomb found in Times Square, including photos and video.

Government Will End Clunker Program Early
NYTIMES
By NICK BUNKLEY
August 21, 2009

DETROIT — The government will end its astoundingly popular “cash for clunkers” program on Monday, more than two months early, because it is already running out of money.

The sudden halt means new-car showrooms will likely see a flood of last-minute shoppers over the weekend. Dealers have until 8 p.m. Eastern time on Monday to submit the 13-page application to be reimbursed for the rebates they are giving out under the program.

Although the program has caused a welcome surge in demand for cars after months of dismal sales, some dealers will be glad to put it behind them because it has been plagued by confusion and processing delays.

The program, formally known as the Car Allowance Rebate System, or CARS, gives consumers a credit of up to $4,500 toward the price of a new car or truck if they turn in an older vehicle with lower gas mileage. It has generated more than 457,000 sales since July 24, prompting General Motors, the Ford Motor Company and other automakers to increase factory output and call back some idled workers.

As of Thursday, the Transportation Department had repaid dealers just $145 million, or 7 percent of the $1.9 billion that they have requested, leaving many in a cash crunch and prompting some to pull out of the program already. The government is tripling the size of the work force assigned to handle the applications.

Scrap Metal Yards At Western Edge Of City Moving North
By TERESA M. PELHAM
Special to The Courant
November 25, 2008

More than a few undesirable sites mar the view along Hartford's highways, especially near the city line. But one ugly area on the west side has a shot a becoming a little more welcoming.

Scrap metal yards on Flatbush Avenue that for decades have been a landmark to drivers heading west on I-84 are moving, and the city is focusing on the area for future commercial and retail development. But the state's economy, now headed for a deeper slide than initially expected, will have to mount a recovery first.

The area will certainly be ready for redevelopment.

Sims Metal Management Aerospace Inc., which traces its roots in Hartford to 1899 and the old family-run Suisman & Blumenthal metal recyclers, recently signed a 25-year lease to occupy the former ADVO building along I-91 in the city's North Meadows. A staggered relocation is planned through fall 2010.

The owner of the 36-acre property, longtime city arts patron Michael Suisman, has been in discussions with the city about future development.

Next door, another smaller scrap metal storage business is closing up shop, and its owner is expected to put the property up for sale.

In the next few weeks, the city will present a plan to redevelop the area that will be left vacant. The Parkville Municipal Development Plan, which has not been released to the public, includes a recommendation to extend Bartholomew Avenue south to Flatbush Avenue, underneath I-84, creating better access and opportunities for commercial and retail development. Four years ago, the Charter Oak Marketplace opened nearby.

"It's premature to say what, specifically, would be a part of that development," said Mark McGovern, the city's director of economic development. "Our focus right now is on public improvements that set the stage for private development. By building a road we increase the value of the land. We're not contemplating purchasing the land. We want to make it more attractive for future businesses."

Sims Metal Management has five buildings at 500 Flatbush Ave. and had been searching for a larger location for four years. The company had considered moving to Springfield, but a $1 million low-interest loan from the state persuaded it to stay, keeping put the company's 130 employees, many with 20 or more years of service. Additional incentives included a five year, 80 percent break on local property taxes and a 25 percent corporate business tax credit.

"We're going to consolidate all of our operations under one roof, which is a lot more lean and green," Aerospace Division President James Nathan said. "We'll have raw materials all the way to finished product all under one roof."

A $25 million renovation has already begun on the 279,000-square-foot former ADVO building, owned by Winstanley Enterprises, and ground is expected to be broken in January on a 145,000-square-foot addition. All scrap metal will be stored inside.

"This might be the largest industrial transaction this year in the Greater Hartford area," McGovern said.

A smaller parcel, owned by Harvey Bixon of New Haven-based Rome Recycling, also is undergoing changes. Smaller than an acre, the property at 45 Olive St. has historically been used to store scrap metal as well as construction and demolition equipment.

Bixon said his scrap metal business closed in 2000. By early next month, his only tenant, which stores construction and demolition equipment at the site, will move to South Windsor, he said. The property will be entirely vacant, aside from an existing billboard.

"I'm going to leave it fenced in and vacant for now," Bixon said. "Some of the scrap metal was moved, and the rest of it will be gone. I haven't heard anything from the city, but I'd definitely want to talk about selling it. It will be available for purchase."

Illegal 'hulk haulers' emerge in Island County as price of metals rises
Whidbey News-Times (State of Washington)
Published: July 30, 2008 10:00 AM
Updated: July 30, 2008 10:38 AM

When journeying down Island County back roads a year ago, one might have discovered a handful of abandoned cars by the side of the road or parked on private lots. Not any more.

That old junker you thought was worth almost nothing is on average now worth about $300 to Puget Sound scrap processors.

Lois Young, who is in charge of marketing and recycling services at Skagit River Steel and Recycling in Burlington, said that the shortage of metals can be attributed to global supply and demand. The relatively nascent Chinese industrial revolution and growth in South America’s latest steel-seeker, Brazil, has resulted in a significant per-ton increase.

According to Young, iron is now fetching about $300 to $500 per ton on the market.

“It has gone up a couple hundred dollars over the last year per ton,” said Young.

This staggering increase is translating into a thriving market for legitimate, but more prevalently, illegitimate hulk haulers and unscrupulous scrap processors who have made some Puget Sound counties home to illegal trafficking.

According to state law, a hulk hauler is “any person who deals in vehicles for the sole purpose of transporting and/or selling them to a licensed vehicle wrecker or scrap processor in substantially the same form in which they are obtained. A hulk hauler may not sell secondhand motor vehicle parts to anyone other than a licensed vehicle wrecker or scrap processor.”

Unfortunately, properly licensed hulk haulers seem to be in the minority.

“It’s unreal,” said Dave Campbell, co-owner of Island Recycling in Freeland, when referring to the recent spike in illegal trafficking. “People are crawling out of the woodwork. A lot of illegal car haulers are hauling without paperwork.”

If you are having your car hauled, Campbell said, “be sure your hulk hauler is licensed.”

Washington State Patrol Trooper T.J. Giddings said a violator is issued a gross misdemeanor infraction, which on average ends up costing the violator about $200. He can also be prosecuted.

“Unlicensed wrecking yards are tied in with illegal hulk haulers,” said Giddings, who is solely responsible for policing 8,500 square miles of hauling and wrecking activity in Island, Whatcom, Skagit and Snohomish counties.

Giddings said locally there is only a handful of licensed hulk haulers and wrecking yards on record, including A-1 Towing, Christian’s Towing, and Island Recycling in Freeland. All three take vehicles from authorized hulk haulers, but they don’t buy them.

“We have a real strict policy” on accepting cars from hulk haulers, said Tom Hopper, lead tow operator at A-1 Towing. “We require a clear title or an affidavit authorized by the DMV (Department of Motor Vehicles). If they don’t have any of that, forget it.”

“We don’t purchase vehicles as a rule,” added Hopper. “However, we’ve had an increase in picking up vehicles for free. We used to charge for that.”

Jessica Clark, shop attendant at Christian’s Towing, said about three to four people a day call up asking if Christian’s buys vehicles. Clark said Christian’s does not buy vehicles because of the paperwork required.

“It really gets sticky” when a wrecking yard starts buying vehicles, Clark said.

Although she did not recollect having had any personal dealings with illegitimate hulk haulers, Clark’s heard that “there have been a lot of people bringing in vehicles chopped up. Now, people think we owe them money.”

Campbell said that it’s standard practice for his company to “get the name, license number and hold it for ten days before we issue the check” to sellers.

As a comparison, Budget Auto Wrecking in Kent, a legitimate wrecking yard and hulk hauler that is the largest processor of vehicles in the state, currently pays hulk haulers $180 a ton for cars with the proper paperwork. When Budget is the hulk hauler, the price varies depending on the distance.

Giddings, who is stationed off I-5 in Bow, knows, however, that illegitimate hulk haulers sniff out the unlawful wrecking yards, so they flock there to cash in their goods. Any illegitimate hulk haulers in Island County who want the money usually end up going off-island to get it.

“There are about 10 to 15 (illegal hulk haulers) that may be running in each county,” said Giddings of his area of responsibility. “A good majority are not properly insured. A lot of them have safety violations.”

Dan Raichart, manager of Budget Auto Wrecking, said Illegal hulk hauling “was a bad thing for a while. It’s trickled down now.”

However, two recent examples testify to how widespread illegal hulk hauling has become.

“We held an emphasis on hulk haulers and scrap haulers on April 10 in Sultan,” wrote Giddings in a recent email. “The emphasis lasted approximately four hours and we stopped five vehicles hauling scrap cars and parts. Of those five vehicles, four of them had violations. There were approximately $1,800 in fines issued between three vehicles with one driver booked and his vehicle impounded.”

The multiple violations ranged from load securement violations, no proof of insurance, expired license plates, and one driver had a $10,000 felony warrant and a suspended license.

In another recent email, WSP Trooper Doug Sackman contacted Giddings about what he saw as “a high increase of vehicles hauling scrap metal and hulk vehicles.”

In a two-day operation, Sackman made five stops in and around Snohomish County.

“The main violations that almost all of these vehicles have in common are load securement, debris, brake and lighting violations,” wrote Sackman, “which from a safety stand point is the reason that we are doing this. The frosting on the cake, if you will, is that we are finding hulk violations and obviously stolen vehicles in this attempt to make SR-2 safer for the motoring public.”

Giddings explained that despite the proliferation of illegal hulk hauling and scrap processing, policing has proven difficult because of the sheer square mileage he has to cover and because criminals falsify documents that prove difficult to check.

“It’s very time-consuming because I have to keep track of 40 wrecking yards and four scrap yards for four counties,” said Giddings.

Wrecking yards can be subjected to hefty fines if they are caught dealing illegally. Giddings has issued these citations “three or four times in the four counties” ranging from $17,000 to $50,000.

According to Giddings, one Bothell wrecking yard has seen illegal hulk activity, but when contacted, the business refrained from commenting on the matter.

In terms of hulk-hauler citations, Giddings has “turned in 15 different civil infractions in the last four to six months.”

What’s most troubling to Giddings is that illegal hulk hauling is tied in with other illegal activities.

“Illegal hulk haulers are involved in other activities,” said Giddings. “About 50 to 75 percent are wanted for other things, including drug violations.”

Metal Objects Are Targets Of Thefts
By ANN MARIE SOMMA | Courant Staff Writer
July 7, 2008
Thieves have stolen everything from empty beer kegs and catalytic converters to aluminum Little League bleachers and fountain fixtures — basically anything made of metal that can be grabbed and carted off to scrap metal yards.

Parishioners worshipping on Easter weekend at the All Hallows Church in Plainfield learned first-hand just how brazen metal thieves can be: A member of the congregation heard a noise, looked outside and saw a man making off with a 30-foot length of copper gutter pipe that he'd taken from a tower in front of the church.

"These people don't have any respect of the sacred. This building is special, it is the Eucharist, the real presence of Jesus," said Wojciech Kowalski, the pastor of All Hallows Church.

The price of copper, aluminum and bronze have risen so high that police departments in the state have seen thieves cut off catalytic converters from cars and rip off vacant homes for copper pipes.

The surge in thievery, which began about two years ago, is driven in part by the rising demand for scrap metal in China, India and Russia. Copper — the king of the base metals — is fetching about $2.80 a pound, up from $1.50 a pound two years ago. The price of metals, mainly copper, has risen in part due to the weak dollar and inflation. Even though copper fell the most last week in more than a month as the dollar and other currencies rebounded, it still remains high.

Neither public nor private property has been spared.In March, someone stole 32 bronze nozzles and eight bronze light fixtures from a fountain on the New Haven Green.

During the Memorial Day weekend, someone stole copper piping that connected the outside air-conditioning unit at Waterbury's Silas Bronson Library.

On Monday, Kevin Sperry arrived at work at the Stanley P. Rockwell Co. in Hartford and noticed that a barrel with 200 pounds of copper was missing from the commercial heat-treating company.

Over the weekend, industrious thieves had broken out a window at the Homestead Avenue factory, entered the building and scooped out the half-inch-tall pieces of copper with a pan and emptied them into a barrel outside.

They had started to fill a garbage can with copper wiring they dumped outside the window, but something or someone interrupted their labors.

"The thievery is out of control. The stealing is going on all over the place in an out-of-control city," said Kevin Sperry, a co-owner of the company.

Beer distributors are asking the state Liquor Control Commission for help because empty beer kegs are routinely stolen from package stores and restaurants and sold for scrap.

"It's a terrible problem," said Edward Crowley, president of DiChello Distributors, a beer wholesaler in Orange. "Not only are we losing out, the retailers are losing out on their deposits, [and] our employees are losing commission to pick up the kegs. The only ones making out [are] the people who are stealing them."

Many believe the thefts will continue unless the economy improves.

"As the economy gets worse, I guarantee this crime will get worse," said Wethersfield Police Chief James Cetran, whose department arrested, earlier this year, a man who stole two aluminum loading docks from the Bed Bath & Beyond on the Silas Deane Highway.

State Sen. Thomas Colapietro championed legislation that takes effect in October that fines scrap metal and junkyard dealers up to $500,000 for buying stolen metals and historical artifacts.

The penalty is part of an existing law that requires scrap dealers to take down license plates of anyone bringing in metal to sell, and to record what they brought.

"People will steal it as long as they have a place to sell it," Colapietro said.

Joseph Miller, who runs Miller Recycling Corp. in Hartford, said he complies with existing law and takes down license plates of sellers.

He said he has cooperated with police and turned over his receipt books, but trying to determine what is stolen is difficult.

"You can't accuse somebody of being a crook just because the stuff looks stolen," Miller said.

Miller said only in rare situations has he turned down stuff because he thought it was stolen.

"Scrap is not like someone stealing a car with a VIN number. It's hard to determine if it's stolen. It's scrap, it could be new and still be scrap," Miller said.

In the Metal Recycling Business, It’s Loud, Dirty and Suddenly Lucrative
NYTIMES
By ANN FARMER
Published: June 27, 2008

Bob Rommeney steered his flatbed truck into a scrap-metal recycling plant in Brooklyn and unloaded two battered cars that had been wrecked days earlier at Riverhead Raceway on Long Island.

Within hours, the discarded vehicles would have their wheels removed, their fluids drained and their bodies crushed into 3-by-4-foot squares. Mr. Rommeney, 54, a retired city sanitation worker, would return home to Maspeth, Queens, about $400 richer.

“It’s worth it to come here and scrap the cars,” he said the other day, waiting his turn in the yard to drive his flatbed onto a large scale. There, workers compared its weight with what it weighed when it arrived at the yard, which is owned by A.R.C. Metal Recycling, to determine how much he should be paid. “Three years ago, I would have gotten about $50 a car,” Mr. Rommeney said. “The money went up.”

It is a very good time for anyone involved in the scrap-metal business. People who collect scrap metal and take it to recycling facilities are getting higher rates for their deliveries.

In turn, metal-recycling companies are selling more scrap metal, particularly to customers in China, India and other developing nations, who are paying record prices. A.R.C. Metal Recycling has recently been selling its scrap steel for close to $500 a ton, more than double the price it received a year ago.

“It’s booming, and it’s still growing,” said Michael Allocco, 24, the general manager of the A.R.C. recycling plant, one of 68 scrap metal processing firms licensed by the New York City Department of Consumer Affairs. The number of these businesses has grown nearly 20 percent in three years.

But the increase in the price of scrap metal has led to a rise in the theft of metal products, particularly anything made of copper. Mr. Allocco said he is vigilant about trying to ensure that none of the metal that is brought to his plant was stolen.

“I don’t accept the shopping-cart guys,” he said, adding that the police had visited the plant with photographs of people suspected of stealing metal, asking if anyone had seen them.

Mr. Allocco takes precautions like photographing his customers and keeping their driver’s licenses on file. “I try to keep the place on the up and up.”

Mr. Allocco’s plant is located in an industrial part of the Greenpoint neighborhood, alongside Newtown Creek and across the street from a new sewage treatment plant, whose bulbous towers add to a surreal landscape. Allocco Recycling, a transfer station for dirt, concrete and other types of fill, was founded by Mr. Allocco’s father on the two-and-a-half-acre site 20 years ago.

A.R.C., which is open 24 hours, buys hundreds of tons of ferrous metal a day. A large portion of it is steel.

At the plant, some of the oversize metal is fed to a huge hydraulic shearer resembling a Tyrannosaurus Rex. Its mighty jaws rear up and rip bulky metal items to pieces.

The arm of a heavy-duty material handler also routinely sweeps across the yard. Its enormous clawlike grapples release squirming loads of twisted metal onto a pile that rises 40 feet while awaiting compacting.

The company also buys thousands of pounds of nonferrous metal daily, which is placed in a warehouse, where a mound of brass car radiators sits alongside a collection of sinks, stacks of aluminum window frames and buckets of copper wiring.

“Nonferrous is worth more,” said Bill Monteleone, A.R.C.’s director of sales. He explained how customers are paid based on the type of metal they sell and whether they have separated the metals.

“The more you fine-tune it, the more you separate, the more money you get,” said Kevin Westhall, 39, who runs a small business removing items from the homes of people who have died. He strips the insulation from old copper wiring and he pries the nonferrous metal out of washing machines.

Separating the metal is hard work, said Mr. Westhall, who makes as many as five trips a day to the recycling yard. “I walk around like a magnet,” he said. “Metal is always on my mind.”

A.R.C. has more than 500 customers that sell to it regularly, including manufacturers, private sanitation and rubbish removal companies and major demolition contractors.

Among the items that have landed in the plant’s heap are miles of the metal bridge decking that made up the former left lane of the Brooklyn-Queens Expressway. It was deposited by the construction contractor who is rehabilitating that stretch of the highway.

The company also attracts smaller-scale customers, like Johnny Slavos, 23, whose ponytail dripped with sweat the other day as he unloaded a 100-pound Cadillac engine that he said he had picked up at a junkyard. He would not say anything more about where he collects scrap metal.

“I can’t tell you my secrets,” he said, explaining that he worried that others might elbow in on his turf. “It’s like the old gold rush.”

Alfred Tiscani, a longtime employee of A.R.C., said he is constantly amused by the variety of things that people bring in, displaying, for example, an ornate tin lamp that he was saving for his wife.

“When I see old cars, I feel bad,” he said, recalling the time someone brought in an antique B Model Mack Truck like the one his grandfather drove.

Nobody at the yard knows what happens to any of the scrap metal after it leaves the site. “Metal has no memory,” Mr. Monteleone said, looking down at the pen in his hand. “It could be made into this pen tip.”

Oil speculation could wipe out pensions; Investments in crude oil are producing phenomenal results now, but an about-face holds the potential for disaster
DAY
By Matthew Perrone
Published on 6/28/2008

Washington - All those speculators getting the blame for driving up the price of oil these days - just who are they? For part of the answer, look in the mirror.

The retirement savings of workers across the country, entrusted to pension fund managers, are being plowed into one of the few investments that has delivered phenomenal returns in recent years. For decades, futures contracts were mostly traded by commodity producers and the people who used the actual products, such as crude oil, corn and soybeans. Agreeing to a price today for a commodity to be delivered in, say, two months is a way to smooth out price fluctuations for those supplies.

But large investors faced with the threat of inflation have increasingly used them as protection against the falling dollar. That includes pension funds, along with investment banks, mutual funds and private hedge funds. Research firm Ennis Knupp and Associates says $139 billion had been funneled into energy commodites, primarily crude oil, by the end of March - and it estimates more than half of that is from retirement money.

The investments have paid off. The Standard & Poor's GSCI index, which tracks a basket of commodities, is up 19 percent in the past five years, compared with just 9 percent for the S&P 500 stock index.

The risk is that if the remarkable run in oil and other futures markets reverses course, billions of dollars of retirement benefits could be wiped out.

”A pension fund is supposed to be investing money in secure, stable investments for the benefit of the people whose money they are investing,” said Dan Lippe, an energy analyst at Houston-based Petral Consulting Inc. “When we hit that wall and things start falling, they will fall very fast, and the pension funds that invested in commodities will see a tremendous loss of value.”

The retirement system for public employees in California, the largest in the nation, has $1.3 billion invested in commodities. Most of it tracks the S&P commodity index. That's still just one-half of 1 percent of the fund's total $240 billion in assets, said Michael Schlachter, who advises the California pension fund. He said a collapse in oil or other commodity prices would have little effect on retirees.

Still, a growing chorus of experts is convinced retirement investments are enough to distort prices. Billionaire George Soros, the airline industry and the International Monetary Fund are all pressuring Congress to curb speculation by large investors. Democrats in Congress say they hope to vote on restrictions by August.

”Your pension fund manager may be using your retirement money to drive up the price of oil,” said Rep. Bart Stupak, D-Mich., at a hearing earlier this week on speculation in commodities. “What would happen if pension fund managers decided to increase their commodity investment by another 20-fold?”

Speculators put money into commodity markets simply to make money on their investments - unlike commercial investors, who are actually buying or selling orders for physical goods. Energy analysts say it's unclear what effect speculators have had on oil prices, which climbed briefly to a new record above $142 on Friday before falling back.

But Stupak and other lawmakers have already dashed off more than a dozen proposals to rein in commodity trading, including limiting how many contracts speculators can hold and closing loopholes that allow them to skirt regulations.

Sen. Joe Lieberman, D-Conn., proposed banning pension funds and other large investors from commodities altogether. He dropped the idea after vigorous opposition by an association of public and private pension funds.

Schlachter, who is also managing director for investment consulting firm Wilshire Associates, called the idea “horrendously bad.” He said pension funds should not be compared to Wall Street speculators, who assume huge risks every day to maximize returns.

”The pension plans we work with are using commodities only as a long-term hedge against inflation,” he said.

Unlike the stock market, where there are a limited number of shares for each company, futures markets have no limits on contracts available. As long as a buyer can find a seller for each contract, investment opportunities are virtually unlimited. Critics say retirement funds that accumulate contracts are artificially driving up commodity prices. In the case of oil, that means higher gas prices and more expensive food and other goods.

”If they're going to be in the futures market they need to trade rather than take this buy and hold strategy,” said Michael Masters, portfolio manager of hedge fund Masters Capital Management. “That is the worst possible thing for the futures market.”

Masters and other experts told members of Congress this week that eliminating excessive speculation could drive oil prices down to about $65 a barrel, less than half the current price. Retirement funds have suffered at the hands of the market before. In 2002, when the stock market swooned after the dot-com crash and 9/11, retirement assets dropped $7 billion, losing 8 percent of their value.

For the Digitally Deceased, a Profitable Graveyard
NYTIMES
By JOHN HANC
November 13, 2008

HARD DRIVES, printers, fax machines and cellphones move along a conveyor belt at the rate of six tons an hour into the gaping maw of a 16-foot-tall, 60-foot-long shredder at e-Scrap Destruction, in Islandia, N.Y.

Inside a chamber covered to prevent flying debris, the machine’s steel blades noisily chew through the components, reducing them to shards no more than four inches long. The shredded material goes back on the belt, where an overhead electromagnet removes material containing iron as the waste moves along.

There is something poignant about the process, the systematic destruction of these unwanted, in some cases never used, components. One more reminder of our disposable society.

This detritus of the digital age spells profit for Trace Feinstein, who founded e-Scrap Destruction two years ago.

“I saw computer recycling as the next big wave,” said Mr. Feinstein, 37, who previously ran a paper-shredding business with his father, Bob. “We did some research and found that not too many companies were doing it the right way.”

Finding ways to dispose of America’s increasingly large stream of e-waste is difficult: an estimated 133,000 computers are discarded by homes and businesses every day. In a 2006 report, the International Association of Electronics Recyclers estimated that about 400 million pieces of e-waste are scrapped each year. And while some prominent manufacturers, like Dell and Hewlett-Packard, have agreed to recycle their own equipment, such programs have so far made only a modest difference.

“It’s a huge problem, and it’s growing,” said Barbara Kyle, national coordinator of the San Francisco-based Electronics TakeBack Coalition, a group that promotes recycling of consumer electronics. “Think about how many gadgets you have now and didn’t have five years ago. We’re buying more and more things with shorter and shorter life spans.”

Ms. Kyle’s organization estimates that there are roughly 1,100 businesses in the United States and Canada that dispose of used electronic equipment, but that only a small percentage try to do it in an environmentally friendly way.

Many recycling companies, Mr. Feinstein said, “dismantle the equipment by hand, ship it overseas, sell it on eBay.” Anything with no value — for instance, the glass on computer monitors and central processing unit frames — often ends up in a landfill.” He and his father, the vice president of e-Scrap, decided that they wanted to handle the scrap more responsibly.

First, though, they had to show clients they could dispose of e-trash thoroughly. Enter the shredder: Mr. Feinstein hired Allegheny Paper Shredders in Delmont, Pa., a company he knew from his work in paper shredding, to build a machine capable of demolishing electronic components, for about $500,000.

“No way you can rescue any data from this,” Mr. Feinstein said, poking with a shovel at some shredded material.

Protecting customers’ privacy — ensuring that no personal or confidential data can be recovered from hard drives or memory — is a crucial selling point for e-Scrap.

That was the case with an important early client, the Town of Hempstead, also on Long Island. With 800,000 residents, Hempstead is one of the largest townships in the United States, and it has an extensive recycling program.

The town’s recycling coordinator, Sal Saia, said many residents were concerned about data security.

In fact, some people who brought their computers to the town’s recycling centers “would actually take the circuit boards out and start smashing them with a hammer,” he said. When he saw e-Scrap’s shredder in action in 2006, Mr. Saia said, he “was completely taken with their whole operation.” Since then, Hempstead has delivered all its electronics recyclables — about 12 tons a month — to e-Scrap.

The company’s pledge to recycle with minimal environmental impact was another reason Hempstead was sold on e-Scrap. That impact could be enormous — for instance, the picture tubes in computer monitors and television sets can contain up to 10 pounds of lead, a toxic substance.

From e-Scrap, the material is sent to MaSeR (Materials Selection and Recycling), a business in Barrie, Ontario, near Toronto, where it is reduced to base materials — glass, plastic, copper and steel — that are then sold. “We have a zero landfill policy,” Mr. Feinstein said, “and so do all our vendors.” He said he visited MaSeR periodically to ensure that the material was fully recycled.

At the end of the shredding process, the e-scrap — remnants of once dazzlingly sophisticated machines — is shipped in 2,000-pound storage containers to the refinery in Canada, where it is ground and pulverized into its very low-tech, base components: small particles of copper, plastic, steel, silver, gold, platinum. This material is then sold to companies that use it in other products.

Mr. Feinstein said his company’s revenues had increased 40 percent annually in each of the last two years, to about $1.4 million.

E-Scrap’s staff has grown to 10 from 6 the year before. And Mr. Feinstein said he expected such growth to continue, aided by a flurry of discarded television sets that is expected when the government-mandated switch to digital broadcasting occurs in February.

“We’re going to have to hire more people, more equipment,” Mr. Feinstein said. “Absolutely, I’m going to be working longer hours.”

So is that shredder.

Trash has crashed.
Back at Junk Value, Recyclables Are Piling Up
NYTIMES
By MATT RICHTEL and KATE GALBRAITH
December 8, 2008

The economic downturn has decimated the market for recycled materials like cardboard, plastic, newspaper and metals. Across the country, this junk is accumulating by the ton in the yards and warehouses of recycling contractors, which are unable to find buyers or are unwilling to sell at rock-bottom prices.

Ordinarily the material would be turned into products like car parts, book covers and boxes for electronics. But with the slump in the scrap market, a trickle is starting to head for landfills instead of a second life.

“It’s awful,” said Briana Sternberg, education and outreach coordinator for Sedona Recycles, a nonprofit group in Arizona that recently stopped taking certain types of cardboard, like old cereal, rice and pasta boxes. There is no market for these, and the organization’s quarter-acre yard is already packed fence to fence.

“Either it goes to landfill or it begins to cost us money,” Ms. Sternberg said.

In West Virginia, an official of Kanawha County, which includes Charleston, the state capital, has called on residents to stockpile their own plastic and metals, which the county mostly stopped taking on Friday. In eastern Pennsylvania, the small town of Frackville recently suspended its recycling program when it became cheaper to dump than to recycle. In Montana, a recycler near Yellowstone National Park no longer takes anything but cardboard.

There are no signs yet of a nationwide abandonment of recycling programs. But industry executives say that after years of growth, the whole system is facing an abrupt slowdown.

Many large recyclers now say they are accumulating tons of material, either because they have contracts with big cities to continue to take the scrap or because they are banking on a price rebound in the next six months to a year.

“We’re warehousing it and warehousing it and warehousing it,” said Johnny Gold, senior vice president at the Newark Group, a company that has 13 recycling plants across the country. Mr. Gold said the industry had seen downturns before but not like this. “We never saw this coming.”

The precipitous drop in prices for recyclables makes the stock market’s performance seem almost enviable.

On the West Coast, for example, mixed paper is selling for $20 to $25 a ton, down from $105 in October, according to Official Board Markets, a newsletter that tracks paper prices. And recyclers say tin is worth about $5 a ton, down from $327 earlier this year. There is greater domestic demand for glass, so its price has not fallen as much.

This is a cyclical industry that has seen price swings before. The scrap market in general is closely tied to economic conditions because demand for some recyclables tracks closely with markets for new products. Cardboard, for instance, turns into the boxes that package electronics, rubber goes to shoe soles, and metal is made into auto parts.

One reason prices slid so rapidly this time is that demand from China, the biggest export market for recyclables from the United States, quickly dried up as the global economy slowed. China’s influence is so great that in recent years recyclables have been worth much less in areas of the United States that lack easy access to ports that can ship there.

The downturn offers some insight into the forces behind the recycling boom of recent years. Environmentally conscious consumers have been able to pat themselves on the back and feel good about sorting their recycling and putting it on the curb. But most recycling programs have been driven as much by raw economics as by activism.

Cities and their contractors made recycling easy in part because there was money to be made. Businesses, too — like grocery chains and other retailers — have profited by recycling thousands of tons of materials like cardboard each month.

But the drop in prices has made the profits shrink, or even disappear, undermining one rationale for recycling programs and their costly infrastructure.

“Before, you could be green by being greedy,” said Jim Wilcox, a professor at the Haas School of Business at the University of California, Berkeley. “Now you’ve really got to rely more on your notions of civic participation.”

The impact of the downturn on individual recycling efforts varies. Most cities are keeping their recycling programs, in some cases because they are required by law, but also because the economics, while they have soured, still favor recycling over landfills.

In New York City, for instance, the city is getting paid $10 for a ton of paper, down from $50 or more before October, but it has no plans to cease recycling, said Robert Lange, the city’s recycling director. In Boston, one of the hardest-hit markets, prices are down to $5 a ton, and the city expects it will soon have to pay to unload its paper. But city officials said that would still be better than paying $80 a ton to put it in a landfill.

Some small towns are refusing to recycle some material, particularly the less lucrative plastics and metals, and experts say more are likely to do so if the price slump persists.

Businesses and institutions face their own challenges and decisions. Harvard, for instance, sends mixed recyclables — including soda bottles and student newspapers — to a nearby recycling center that used to pay $10 a ton. In November, Harvard received two letters from the recycler, the first saying it would begin charging $10 a ton and the second saying the price had risen to $20.

“I haven’t checked my mail today, but I hope there isn’t another one in there,” said Rob Gogan, the recycling and waste manager for the university’s facilities division. He said he did not mind paying as long as the price was less than $87 a ton, the cost for trash disposal.

The collapse of the market is slowing the momentum of recycling overall, said Mark Arzoumanian, editor in chief of Official Board Markets. He said the problem would hurt individual recycling businesses, but also major retailers, like Wal-Mart Stores, that profit by selling refuse.

Mr. Arzoumanian said paper mills in China and the United States that had signed contracts requiring them to buy recycled paper were seeking wiggle room, invoking clauses that cover extraordinary circumstances. “They are declaring ‘force majeure,’ which is a phrase I’d never thought I’d hear in paper recycling,” he said.

Mr. Arzoumanian and others said mills were also starting to become pickier about what they take in, rejecting cardboard and other products that they say are “contaminated” by plastic ties or other material.

The situation has also been rough on junk poachers — people who made a profitable trade of picking off cardboard and other refuse from bins before the recycling trucks could get to it. Those poachers have shut their operations, said Michael Sangiacomo, chief executive of Norcal Waste Systems, a recycling and garbage company that serves Northern California.

“I knew it was really bad a few weeks ago when our guys showed up and the corrugated cardboard was still there,” he said. “People started calling, saying ‘You didn’t pick up our cardboard,’ and I said, ‘We haven’t picked up your cardboard for years.’ ”

The recycling slump has even provoked a protest of sorts. At Ruthlawn Elementary School in South Charleston, W.V., second-graders who began recycling at the school in September were told that the program might be discontinued. They chose to forgo recess and instead use the time to write letters to the governor and mayor, imploring them to keep recycling, Rachel Fisk, their teacher, said.

The students’ pleas seem to have been heard; the city plans to start trucking the recyclables to Kentucky.

“They were telling them, ‘We really don’t care what you say about the economy. If you don’t recycle, our planet will be dirty,’ ” Ms. Fisk said.

Abandon ship!
Another way of expressing this opinion?

Up in Smoke: Harrisburg’s waste to energy to bankruptcy saga
Weekly Standard
Jonathan V. Last
October 31, 2011, Vol. 17, No. 07

On October 12, Harrisburg, the capital of Pennsylvania, filed for bankruptcy. The move took most of America by surprise—headlines on CNN and the Drudge Report played the story as breaking news. It was not. Harrisburg’s failure has been so long in the offing that last June the state legislature passed a law forbidding the city from declaring bankruptcy until July 2012. (The city will challenge this law in court.) People in Pennsylvania have been waiting for Harrisburg to go broke for a long time.

Harrisburg’s financial ruin has long been assured, but not for any of the usual reasons. There are no runaway pensions eating up the budget or dirty officials embezzling funds. The city’s tax base has not hollowed out like Detroit’s. Instead, Harrisburg was doomed by a single project: a waste-to-energy incinerator that has left a city with an annual budget of $55 million some $280 million in debt. That’s a debt load of $6,000 for each of the 49,500 men, women, and children in town, an amount so staggering it was impossible for the city to sustain it. (The saga has been chronicled by John Luciew of the local Patriot Times for several years in a tour de force of reportage.)

Harrisburg’s runaway incinerator is a compendium of failure—a combination of fashion-based policy, bad decisions by a local government, and schizophrenic federal mandates.

The story begins in 1967, when Harrisburg contracted with a local engineering firm to conduct a study of its waste-disposal needs. This was a period in American life when garbage disposal was just beginning to take shape as an engineering field. Prior to the mid-’60s, more than half the towns in America had no long-term plan to deal with solid waste; they simply found the cheapest available land and dumped their refuse or buried it in landfills. The proper planning and management of dumps and landfills had yet to be refined, and many of these sites were considered hazards. It was common throughout the period to hear garbage horror stories, like the great fire at the Kenilworth dump in Washington, D.C., or the toxic-waste scare at Love Canal in New York.

Then the federal government stepped in. Incinerators had been around since before the turn of the century: The Army built the first American incinerator in 1885. And while they had been popular in big cities during the 1930s, they fell out of favor over the next 30 years. As the federal government began grappling with waste management, it decided to give the incinerator industry a little boost to help revive it. To that end, the 1970 Clean Air Act put an end to open-burning at landfills, making landfills more costly to operate and incinerators an attractive alternative. It was not terribly surprising that Harrisburg’s consultants recommended the town build its own incinerator.

An incinerator works about the way you’d imagine: Trash goes into a furnace, mechanical grates churn it, and intense heat reduces it to ash, which is ejected out the side while gaseous emissions are pumped out of a stack. Harrisburg’s incinerator was built for $12 million and boasted a total theoretical burn capacity of 500 tons per day. It opened for business on October 10, 1972.

From the start, the plant didn’t work very well. There were frequent explosions and unintended fires. Ash kept gumming up the mechanism, and whenever the metal grates jammed, the entire system had to be shut down. It’s unclear how much money the operation cost the city during those early years, but it was a major announcement when the town’s mayor declared, in 1981, that he had gotten the incinerator out of the red. Later evidence suggests that the mayor was exaggerating: The plant continued running at a loss until 1985. Either way, the expenses piled up: In addition to the initial cost, and the revenue hole, and higher-than-expected maintenance, the debt had to be refinanced. A few years later, the city had to float a $25 million bond just to clean out the incinerator’s landfill. Locals dubbed the plant’s 80-foot-tall pile of ash “Mt. Ashmore.”

But in the midst of all the bad news, there was a glimmer of hope. As part of the ’70s oil shocks, parts of the American energy establishment cottoned on to the idea of turning “trash to steam” to generate electricity. In 1978, for instance, the Public Utility Regulatory Policies Act was passed requiring the Federal Energy Regulatory Commission to guarantee a market (meaning subsidized loans) for electricity produced by small power plants (meaning trash-to-steam facilities). The idea was simple: Use the heat from incinerators to send steam from boilers through turbines, which generate electricity. The Europeans had been using variations of trash to steam for years, and if the Europeans liked it, it had to be a good idea. The first American waste-to-energy plant (engineers in the field hate the term “trash to steam”) opened in Massachusetts in 1975; and the fad spread nationwide.

Harrisburg jumped on the bandwagon in 1984, when it built a 5,000-foot pipeline to vent steam to power a nearby Bethlehem Steel plant. In 1985 the town added a turbine, for on-site electricity generation. But the added revenues did little for the bottom line. In 1993 the city unloaded the plant, selling it to a quasi-public utility, the Harrisburg Authority. The incinerator was “sold” for $40.7 million, which wasn’t as good a deal as it looked. The Harrisburg Authority was closely tied to the city, and most of the money from the sale was in IOUs.

Shunting the incinerator to the Harrisburg Authority was mainly a way to insulate the town’s mayor and council from the decision to raise garbage collection fees. The city was still on the hook for the costs of the plant. For instance, when the incinerator needed $10 million worth of repairs in 1996, the Harrisburg Authority technically borrowed the money—but the city backed the loan and guaranteed whatever payments the company couldn’t make.

In the late ’90s pollution from the plant began to get worse, too. Dioxin levels ran eight times higher than they had been just a few years earlier and the incinerator was clearly on the wrong side of the 1990 amendments to the federal Clean Air Act. Harrisburg bargained with the EPA for a decade before the feds finally came in and shut the incinerator down in December 2000.

The shutdown was a crisis for the city. They still owed enough money on the facility that they needed the revenues it provided (even though it still ran at a net loss). And the city continued to believe that, if the kinks could just be worked out and the boilers kept running at peak capacity—for much of the time, the plant limped along at 25 percent capacity—then it could eventually be made profitable. And sitting out there was the debt load. Abandoning the plant would mean eating the entire nut, with nothing to show for it.

The EPA gave the city two options: shut the incinerator down permanently, or put in place a plan to meet federal air-quality standards by 2003. The city deliberated for three weeks. Then they decided to double down.

Over the next three years, the city requested bids for modernizing the plant. The proposals from the big players in the industry were in the $100 million range. (The highest bid came in at $178 million.) But one contractor stood out. Barlow Projects had a revolutionary design for waste-to-energy boilers. They were willing to do the job for $57 million.

The Barlow price was a trap. It was so low that it should have sent the city running. But by 2003 the total accumulated debt on the incinerator was $104 million. So the fact that the price was absurdly low made it, for a city already on the ropes, almost impossible to pass up.

Retrofitting the plant meant shutting it down for three years. In order to pay for the job, cover lost revenues, and maintain service on their existing debt, the city had to take out $125 million in new loans. The plan called for rebuilding the existing two boilers and adding a third, upping the plant’s capacity to 800 tons per day. In addition, Barlow’s proprietary technology promised that the boilers would have no moving parts (forced air would churn the trash), so they would not constantly be on the fritz, as they were in the old plant. The plan projected that revenues from the new facility would be $23.2 million in the first year and would rise robustly from there. By 2034, it would be generating $44 million a year and the entire debt would be worked off.

The cascade of failure which followed resembled the sinking of the Titanic.

The problems began immediately. The new contractor, Barlow, revised its cost upward to $77 million before it even began work. Also, it turned out that the firm was too small an operation to get bonded for a project of such magnitude. Instead, the city sought to protect itself by withholding large chunks of payment until goals were met, attaching stiff penalties for failure.

Barlow’s lack of experience proved problematic. Right off the bat, one subcontractor, a steelworks in charge of forging the boilers, ran six months behind schedule. This destroyed the entire timeline—a big problem since the town’s $125 million loan only covered its debt-service payments through what was supposed to be a hard completion date.

And that’s when things got really bad. In the legal world, entities without money are thought of as “judgment proof.” That is, even if you could win a lawsuit against a bad actor, it wouldn’t really matter, since they couldn’t pay you. Barlow was “penalty proof.”

Barlow Projects was so undercapitalized that by 2005 it wasn’t able to continue work on the project without the funds the city was withholding. Barlow was behind schedule and hadn’t met its goals, but it was also on the verge of going out of business. So the city couldn’t penalize it. In fact, Harrisburg had no choice but to continue fronting money to the foundering company—because if the city pushed Barlow under, the project would be in even deeper trouble. So long as there was a chance Barlow might finish the job, the city would do whatever it could to keep the company afloat. Harrisburg was shoveling good money after bad; but by this point, it had no better option.

As Barlow began to sink, the city disbursed the money it had been holding in escrow. When Barlow went over deadline and was supposed to be paying $22,000 for every day each boiler was late, the city forgave the penalty. But in the end, the city couldn’t drag Barlow across the finish line. The company went bankrupt, the third boiler was never finished, and the city finally sued Barlow for $70 million. This lawsuit, however, was mostly therapeutic: To the extent the company still exists as a legal entity, it will never be able to compensate Harrisburg for the damages it caused.

By the time Barlow gave up the ghost, Harrisburg’s incinerator was a shambles. A story in Governing magazine reported that “streams of water flowed through the facility, amidst piles of ash; . . . the all-important third boiler had been ‘completely scavenged’ to maintain the two existing boiler units.” Another firm, Covanta Energy, was hired in December 2006 to try to salvage the job. When he first saw the plant, Covanta vice president Jim Klecko reported, “I don’t want to say I was scared, but I had reservations about physically going through the facility.” Without the third boiler, the city was losing another $1 million a month. The total debt from the incinerator stood at $288 million.

From the minute the Barlow project failed, it became clear that the city would eventually take refuge in bankruptcy. The debt load was simply too great for a town of such modest size—there was no way to dig out. That’s why Harrisburg declined to make any payments on its debt in 2010. Like a homeowner underwater on his mortgage, the town realized that there wasn’t much point treading water on the note because eventually it would have to hand over the keys and walk away.

To that end, the city declined not only to service its debt but to take measures that might at least have put a dent in its obligations. It raised property taxes, but only slightly. It cut a handful of city workers. But when the mayor—whose career was effectively over—put forth a proposal to lease city-owned garages near the capital for $100 million, the council rejected it. The council understood that $100 million wouldn’t get the city out of danger and they were better off retaining what assets they had.

Eventually, the mess will be sorted out by the courts. Harrisburg is suing Barlow for breach of contract and asking another court to nullify the state’s attempt to keep it out of bankruptcy. Bondholders have filed six suits against the city, seeking to get at least some portion of the total debt or at least a chunk of the $65 million which is already overdue. Late last week, the state legislature voted to take the city into receivership.

As for the incinerator, Covanta, which came in on the salvage mission, has taken over the plant and has it up and running again—and burning Harrisburg’s trash. The company claims that the incinerator is now running at 92 percent capacity.