COOLIDGE, Ariz.-Several Arizona counties are nearly bursting at the seams with scrap tires since the firm hired to dispose of them has declared bankruptcy to stave off cancellation of its contract. The predicament has forced an ``emergency situation,'' said a county administrator who awaits a ruling from a federal bankruptcy judge before a replacement waste tire collector can be named.
Meanwhile, the tires have piled up in 13 of the state's 15 counties, while Colinas Tire Recovery Inc., a longtime retreading and recycling company in Casa Grande, Ariz., and its partner, Pacific Palisades, Calif.-based REPCO, sought protection from creditors March 22 under Chapter 11 of the federal bankruptcy law.
In February, TIRE BUSINESS outlined Arizona officials' frustrated attempts to clean up the state's scrap tires, beginning with their awarding a contract to Colinas in September 1993.
The company has been paid more than $750,000 by Maricopa County officials who formed a 13-county consortium to provide Colinas with waste tires which the firm has been collecting and shredding for use in an innovative pyrolysis plant it hoped to build and begin operating this month.
Officials charge that Colinas has not recycled a single tire. And the plant is yet to be built.
After initial funding for Colinas' project fell through, the company allied itself last October with REPCO, which was to finance construction of the $3.5 million to $4 million pyrolysis plant in Coolidge the two firms would operate as United Waste Recovery Inc.
By contract, the firm was required to provide a $1 million performance bond. But in interviews with county and state officials, TIRE BUSINESS was told REPCO secured bonds from off-shore agents, including one from the Canary Islands, that were not state-recognized bonding authorities.
Lawmakers, who created the state's mandatory recycling program in 1990 and funded it with a 2-percent surcharge on new tires, have criticized the county for not getting the program under way.
Noting that the two counties outside the coalition, Yavapai and Pima, have their tire recycling programs in operation, lawmakers have considered cutting off funding for the coalition.
So while Maricopa's Board of Supervisors met recently to cancel the company's tire recycling contract, REPCO officials were in Tucson filing a petition in U.S. Bankruptcy Court to freeze its assets.
Now, until the bankruptcy judge sets some guidelines, the county has its hands tied, unable to engage a replacement for REPCO.
Telephone calls to Jim Seal, REPCO's business-development representative, were not returned.
However, Barney Hills, general manager of Colinas, which is owned by his father, Clay, told TIRE BUSINESS the only reason the company filed for Chapter 11 was to stay the contract, ``because we feel we have performed.''
The Hills family also operates The Tire Factory, a retail tire and auto service outlet in Coolidge.
After the county wouldn't accept several performance bonds submitted by REPCO, he said the company ``had to get (the issue) out of the political arena and into a neutral corner,'' which he hoped the court would provide.
At this point, the company is ``not shredding or anything-and that's going to become an issue, too,'' he said, claiming he has news releases from county officials stating REPCO has been in compliance with its contract.
Mr. Hills said REPCO ``has reassured all the people in our community and us. . . that they're moving forward with the project.''
The prefabricated building that will house the plant is ready to be shipped to the site, he said.
But Louis Schmitt, associate county administrator for Maricopa, said ``there's a marvelous basketball court there,'' referring to the concrete slab where the plant was to be erected.
``We're just waiting for the bankruptcy judge to tell us what to do,'' he said, adding: ``We're in an emergency situation and asking other companies for quotations.''
Because REPCO listed as its assets the waste tire contract, officials were prevented from terminating the contract until the judge rules on the matter, said Dan Smolnik, waste tire coordinator for the Arizona Department of Environmental Quality.
Maricopa ``has been riding this dead horse for almost two years now-and we still haven't disposed of a tire,'' he said. ``. . . If this situation drags on in court, then we're in really big trouble.''
Pyrolysis has ``never really caught on anywhere,'' Mr. Smolnik conceded, noting that companies like Goodyear and Exxon haven't come up with a workable pyrolysis system. ``But I thought maybe these guys (REPCO) had a new mousetrap I didn't know about.''
Meanwhile scrap tires are coming in at an estimated rate of 200,000 per month.
When the counties fill up, they ``close the doors'' to the collection sites, Mr. Smolnik said. ``Then all the tire dealers have to find a place to put their scrap tires.
He added, jokingly, ``Tire dealers call me up and threaten to bring their scrap tires to my house.''