Colorado Retools Tire Recycling Program After Denver Post Expose

Colorado lawmakers and business owners are retooling the state’s Waste Tire Program to close a loophole. The Denver Post reported last month that the state paid tens of thousands of dollars per month in stipends to Magnum, owners of the world’s largest tire dump, amidst a federal investigation and lawsuits that alleged securities fraud. Magnum was the only company paid from the fund that did not have plans for the shredded tires. Colorado lawmakers want to either get rid of the fees or help companies invest in technologies that make use of scrap tires.

Colorado’s Waste Tire Program, a tire recycling program, is funded by $1.50 fees collected from every tire purchased. The program paid Magnum $490,000 over 15 months, with the payments reaching $62,000 a month. The company received its last payment of $15,084 on September 19. The Denver Post reports that the payment was made “just days before a Denver investment firm foreclosed on Magnum's 120-acre site in Hudson for defaulting on a $1.4 million loan.”

The payments continued even though the firm, FGH, which purchased Magnum’s 120 acre dump in September, repeatedly asked for the state to withhold them. State officials, according to the Denver Post, were aware that Magnum “did not have any contracts to move the material.” State officials also knew of a Securities and Exchange Commission investigation.

The Waste Tire Program is only allowed to reimburse companies for shredding tires that come from Colorado, but Magnum was reimbursed for shredding tires from Wyoming.

The problem with the program is that “under the law, if a company processes a waste tire, it is eligible for reimbursement,” said Brian Gaboriau. ““There was no legal justification for denying that reimbursement.”

"The recipients of the Processor and End User Reimbursement Program do not have to report what they do with the money," health-department spokeswoman Jeannine Natterman said in an e-mail.

What Colorado can learn from Ohio

Colorado can learn a thing or two from Ohio’s scrap tire abatement program. The program has been praised by environmentalists and the tire industry. Beginning in 1987 when the only an estimated 33 percent of all tires in Ohio were recycled, by 2005 the state boasted a 90 percent recycling rate. Ohio’s program uses state funds to clean up tire disposal sites, and tries to recover the costs from the property owner.

In 2006, Ohio’s Scrap Tire Program received an award from the National Registry of Environmental Professionals. The Rubber Manufacturers Association (RMA) rated the program as one of the three most improved state scrap tire programs, and ranked it seventh out of the 50 states.

Photo: Flickr user, Victory of the People