An approved emergency funding request by Kitimat Council for the Kitimat Understanding the Environment (KUTE) recycling centre will keep the group afloat as they handle the hurdles of low paper pricing and high labour costs.
KUTE will now get an additional $2,500 a month from the District of Kitimat to offset their shortfalls.
KUTE’s double-whammy includes labour costs that reflect an increased minimum wage, and employment costs related to a high turnover of staff. As well, the price of cardboard and office paper has tumbled to levels that make it impossible to actually make money, let alone break even.
“We’re losing money as we speak,” said KUTE President Barb Hall. “I’m not trying to make money, I’m just trying to keep the place going.”
In a letter to councillors, Hall outlined the losses the organization has seen since November. In that month they lost $3,319.15, in December they were down $3,132.66, in January it was $2,550.24 and in February they lost $2,793.73.
They’re currently facing a cardboard price of $50 a tonne, which is down from $70 in February last year. Meanwhile office paper has tumbled from $125 to $60 a tonne.
“We need it to be in the $90 a tonne [range],” said Hall about cardboard. She didn’t say how high office paper would need to go to make money on processing it but said as well it would have to go much higher.
She has no indication on when the price of cardboard might rise again.
“It’s one of those things, how do you know?” she said. “If I knew that, I would be a billionaire.”
Hall notes that last year’s residential cardboard ban is not a significant factor in their money losses.
“It’s not that we have the cardboard ban that is the problem. It’s just that we’re losing money a little bit faster,” she said. “It is a factor but it would happen regardless. We just had so many things happen all at once. All these people leaving so we don’t have real experienced people there either.”
In her letter to council Hall said that KUTE had lost six employees since November 2012, two of those being depot managers. In a three week period they had to pay ten weeks worth of holiday pay for outgoing employees, she wrote to council.
“It’s been a tough four months,” she later said over the phone.
Saying they’re on a “fairly thin edge,” she said the new money from the District will help keep them just about even as they weather the storm.
The amount is to be reviewed regularly as conditions change and KUTE does expect their need to go down as conditions improve.
Hall said that it isn’t the first time that KUTE has received emergency funding and that KUTE did pay money back to the District once conditions changed at that time.
There was little debate at the council meeting to approve the funding, with Mario Feldhoff essentially saying that money spent on the recycling depot is “well spent” and the motion went quickly to a vote which passed unanimously.
All in all the extra funding will mean an extra $10,000 spent from the District’s 2013 budget, and will come out of the accumulated surplus.
