COOLIDGE, Ariz.-It's a good thing Arizona isn't holding a contest anytime soon to determine its favorite scrap tire processor. Right about now, REPCO Waste Recovery of Arizona Inc.'s piles of shredded scrap tires are higher-a lot higher-than its popularity.
The company that has been in hot water repeatedly for more than a year with its only customer, Maricopa County, has problems again. According to an Associated Press report, the county claims REPCO isn't living up to its contract. But a company official told TIRE BUSINESS it is.
Problems exist, he acknowledged, but they're nothing that can't be solved soon.
This saga began in September 1993, shortly after a consortium of 13 of the state's 15 counties awarded a contract to a longtime tire retreading and recycling company, Colinas Tire Recovery Inc., to remove and recycle tires from the counties' landfills. Several times since, the situation has reached the breaking point:
The project's recycling component stalled after Colinas, of Casa Grande, Ariz., lost some crucial financing and was unable to meet its contractual agreements.
Enter REPCO, of Pacific Palisades, Calif. It formed a joint operating venture with Colinas to collect and shred scrap tires for what it claimed would be an innovative $3.5 million pyrolysis plant that was to have been built last spring in Coolidge, but wasn't.
Eventually, the firms received an ultimatum from the counties-remove two piles of 100,000 shredded scrap tires on the plant site, or face a $500-per-tire fine.
Then last March, Maricopa County tried to terminate REPCO's contract after the firm failed to secure an acceptable $2 million performance bond.
Partly as a legal maneuver, the company filed for protection against creditors under federal bankruptcy laws, listing the contract as its main asset and declaring all its assets frozen. Millions of used tires then began backing up at disposal and collection sites, prompting the county to declare an emergency and temporarily hire other contractors.
The U.S. Bankruptcy Court eventually ordered Maricopa to reinstate the contract after REPCO filed the performance bond.
Recycling efforts restarted after REPCO agreed to process double the amount of tires-it had been doing about 25,000 tires daily. But on Aug. 22, the county notified REPCO it was again in violation of its contract.
And that's where the issue now stands, although a new wrinkle was added to the mix early last month, when REPCO notified the county that it had been purchased.
According to Jim Seal, REPCO's vice president of government relations, the company has been acquired by Combined Companies International Corp., a publicly held Nevada firm he described as a ``high-tech incubator company'' that buys small, growing companies, takes them public, infuses capital, then spins them off.
He said REPCO and Maricopa are currently trying to renegotiate some of the minutiae and problems inherent to their contract in order to reach ``an equitable agreement.'' A remedy, he believes, may be several weeks away.
``If REPCO were out of the picture, I maintain that (the counties) will never'' reach removal and recycling levels mandated by the state's Department of Environmental Quality, Mr. Seal said. ``It's virtually impossible because no other company can go in there and remove those amounts of tires'' for the $40 per ton tipping fees to which REPCO has agreed.
The counties have already paid the company about $1.3 million.
Mr. Seal contends REPCO is not meeting its tonnage goals, in part, because it goes where it's told to by the county. And that Maricopa abruptly yanked all tire recycling contractors out of one of the state's largest landfills, Northwest Regional-a place he said has ``miles and miles of scrap tires.''
``We've been pulling out truck tires from there for a long time-that's a monumental task. Nobody wants truck tires,'' he claimed, including Baker Southwest, a Mesa, Ariz., firm that shreds used tires into tire crumb for two other Arizona counties.
Meanwhile, REPCO and the county haggle over contract compliance, both raising as many new issues as they solve, Mr. Seal said, adding there is no way the company can get its production levels up unless it's again allowed into the Northwest Regional site.
In the interim, REPCO is working on a short-term solution to reducing its piles of scrap tire shreds at the pyrolysis plant site by providing them for a Pinal County road project that uses the shreds as a lightweight substrate fill.
And eventually the shreds will be used for the pyrolysis plant, which Mr. Seal said ``has to be built,'' according to REPCO's contract. The company is revising its construction schedule, but has already poured a concrete pad on which the 24,000-sq.-ft. plant is expected to be operational Jan. 1.
He said the project still is do-able. ``Sure, the tipping fees are low-some argue too low. But I still believe we can do the shredding at a cost lower than anyone else can do it.''