CIWMB Agenda Item-12 June 16, 2009

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CIWMB Agenda Item-12 June 16, 2009

    California Integrated Waste Management Board

    Board Meeting

    June 16, 2009



    Consideration Of The Recycling Market Development Revolving Loan Program Application For

    Ability Counts, Inc. (Recycling Market Development Revolving Loan Subaccount, FY 2008/09)


    This agenda item presents for consideration the Ability Counts, Inc. (Ability Counts)

    application to the Recycling Market Development Revolving Loan Program (RMDZ

    Loan). Ability Counts is requesting a $685,000 loan to finance leasehold improvements

    for the relocation and expansion of their plastic hanger recycling operation in Riverside,

    California. Ability Counts is projecting to add at least 30 employees and divert an

    additional 1,230 tons per year of plastic hangers as a result of the loan. The City of

    Riverside is in Riverside County and within the Agua Mansa RMDZ.


    On August 20, 2002, the California Integrated Waste Management Board (Board)

    approved an RMDZ Loan in the amount of $271,000 to Ability Counts for equipment and

    working capital. The loan was sold to Capital Crossing Bank in 2004; and according to

    bank reports, the loan is being repaid as agreed.


    1. Approve the RMDZ Loan application for Ability Counts, Inc.; and adopt Resolution

    Number 2009-85.

    2. Approve the RMDZ Loan application for Ability Counts, Inc. with revisions, and

    adopt Resolution Number 2009-85.

    3. Take no action and provide staff with further direction.


    Staff recommends Option 1 and adoption of Resolution Number 2009-85.


    A. Key Issues and Findings

    Organization Background

    ? Ability Counts, Inc. is a California non-profit 501 (c) (3) corporation established

    in 1980 to provide individuals with developmental disabilities meaningful

    vocational training and employment. The organization has had significant growth

    and success over the years and presently manages a budget in excess of $7 million.

    Corporate offices are located in Corona, California; while the plastic recycling

    program is located in the City of Riverside.

    ? The primary focus of Ability Counts is to create and maintain employment

    opportunities for individuals with disabilities, who live in the greater

    Corona/Riverside area. Funding for the vocational training program is based on a

    fee-for-service, which the California State Department of Developmental Services

    directs and monitors as outlined by the Lanterman Act.

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    Board Meeting Agenda Item-12

    June 16, 2009

    ? Ability Count‟s largest occupational skill training area is in its plastic recycling

    program which started in 1992. The current focus of this program is reuse.

    ? The organization is managed by a volunteer Board of Directors, and provides

    vocational training and employment to 470 developmentally disabled individuals,

    over 100 of whom work in the plastic recycling program. Ability Counts

    maintains full accreditation with the Commission for the Accreditation of

    Rehabilitation Facilities.

    ? The business is located at 3810 Garner Road, Building F, Riverside, Riverside

    County, California.

Proposed Project

    The recycling operations of Ability Counts have grown and the organization has

    moved to a new and larger site to accommodate the expanding operation. The

    proposed project is directed at making leasehold improvements, such as

    improvements to the electrical system and equipment, at the new training facility

    located at the Garner Road site in the City of Riverside. The project will enable the

    organization to not only expand their present recycling program, but also employ

    more individuals with disabilities and partner with more retail stores in the region in

    their plastic garment hanger recycling program. This new facility will allow Ability

    Counts to potentially increase its current processing capacity by 40 to 50%.

The project involves collecting and sorting used plastic garment hangers and

    repackaging them for reuse. Hangers are first collected at the local department store

    by employees and transferred to department store distribution centers. The hangers

    are then transported to Ability Counts for processing. Hanger materials are first

    sorted for quality and those considered of „ reusable quality‟ are sorted by style and then repackaged for reuse. Hanger materials that are considered „poor quality‟ are

    further sorted for contaminants and shredded into smaller pieces. Those broken

    pieces of hanger material are then sent through a magnetic chamber that separates the

    metal from the plastic. The plastic is then granulated and sold along with the pieces

    of metal.

Diversion & Jobs

    Ability Counts Current Increase Total

    Recycling Division (2008) Diversion (tons/year) 1,890 1,230 3,120

    Jobs 100 30 130

Proposed Loan

    Ability Counts is requesting an RMDZ loan of $685,000 to make leasehold

    improvements. The proposed RMDZ loan funding represents 75% of the total

    projected cost of $913,350.

     Board Approved Project Eligibility Criteria ? Under the Board‟s approved September 2008 Project Eligibility Criteria, the

    project qualifies as a reuse project to prolong the useful life of a product, delaying

    final disposal or recycling.

    ? Staff has reviewed borrower‟s application and found that it is consistent with the

    Board‟s criteria for project eligibility.

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    June 16, 2009

    Interdivisional Reviews

    ? Since this proposed project does not require any permits from the Board, an

    internal review of this project was only conducted by the Board‟s Local

    Assistance and Market Development Division. Based on the information in the

    jurisdiction‟s Source Reduction and Recycling Element, discarded hangers that

    will be used as feedstock for this project are normally disposed of in landfills. ? The applicant has certified that the project complies with all local, state and

    federal laws, regulations, requirements and rules, including the California

    Environmental Quality Act.

RMDZ Loan Committee

    RMDZ Loan Committee will meet on June 4, 2009 to consider staff‟s analysis of

    Ability Counts, Inc.‟s loan application and their ability to repay and collateralize the

    loan. The results will be presented at the June 10, 2009 Market Development and

    Sustainability Committee meeting.

    B. Environmental Issues

    Based on information available, staff is not aware of any significant environmental

    issues related to this project.

    C. Program/Long Term Impacts

    This project will assist in the implementation of the Board‟s 2009 Strategic Directive

    6 “to assist in the development of viable, sustainable markets to divert materials from

    landfills and encourage the source reduction and recycling”. This project will process

    3,100 tons per year of plastic waste and will contribute to the diversion of that

    material from the waste stream, thereby assisting the local jurisdiction‟s compliance

    with the 50% disposal reduction mandate under the Integrated Waste Management

    Act, Assembly Bill 939.

    D. Stakeholder Impacts

    ? The Agua Mansa recycling coordinator, Zone Administrator and Riverside

    County jurisdictions are the key stakeholders for this project and support the

    proposed loan.

    ? The project is expected to further increase the City‟s diversion rate while

    potentially creating more jobs and indirect revenue for the City of Riverside. ? The project will also provide more jobs for the residents with disabilities,

    providing them with meaningful full time work, social connections, wages, and

    independent living skills.

    E. Fiscal Impacts

    ? Public Resources Code, Section 42023.1 provides authority to the Board to

    approve and fund RMDZ loans.

    ? This loan request is funded by the Recycling Market Development Revolving

    Loan Program Subaccount.

    F. Legal Issues

    Based on the information available, staff is not aware of any significant legal issues

    related to this project.

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    Board Meeting Agenda Item-12 June 16, 2009

    G. Environmental Justice

    Based on information available, staff is not aware of any significant environmental

    justice issues related to this project.


    1. Fund 2. Amount 3. Amount to 4. Amount 5. Line Item

    Source Available Fund Item Remaining

    RMDZ Loan

    Subaccount Direct Loan $7,746,000 $685,000 $7,061,000 (FY 2008/09)


    (A) The Subaccount is owed $1,853,000 from a five year loan to the state General Fund

    that originated in 2003. The original payback date was June 2009, however this was

    recently extended to Fiscal Year 2011/12, one year after the July 1, 2011 program

    sunset date.


    1. Resolution Number 2009-85


    A. Program Staff: Jeremy Callihan Phone: (916) 341-6537

    B. Legal Staff: Shelly Bromberg Phone: (916) 341-6076

    C. Administration Staff: Suzanne Blihovde Phone: (916) 341-6178


    A. Support

    The Zone Administrator for the Agua Mansa Recycling Market Development Zone

    has provided input and support for this project.

    B. Opposition

    Staff had not received any written opposition at the time this item was submitted for


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