Arkansas' scrap-tire districts are in poor financial shape and in need of more accountability measures, according to an analysis by a state representative.
Rep. Lanny Fite, R-Benton, and Michael Grappe, executive director of the Saline County Regional Solid Waste Management District, compiled a report this fall based on reports from solid waste and scrap-tire districts on the tires processed and sold in their coverage areas, budget information, and data on Arkansas Department of Environmental Quality grants disbursed to them.
In their analysis, Fite and Grappe found that the four tire districts that are run out of a regional planning and development district reported operating, on average, within budget from 2011 through the present. The state's 11 waste tire districts that either operate independently or out of a regional solid waste district all reported losing money overall during that same time frame.
Fite said he believed that difference was partly because the funding formula for waste tire districts was designed for when tire districts were still a part of planning and development districts. After most tire districts left planning districts, the formula began to disadvantage them by lowering the number of counties and their populations that could be included in the formula.
"I feel that's very unfair," Fite said.
The districts that were in the black were Boston Mountain, East Arkansas, Southeast Arkansas and West River Valley.
The profits shown by some districts could indicate the receipt of funds outside of the formula, too, such as grant funding and general improvement funds from state legislators. West River Valley has received money from both grants and legislators.
Additionally, tire districts mostly reported processing more tires than were sold within their district boundaries, the analysis found. A state law passed in 2015 prevents the Department of Environmental Quality from questioning those numbers before disbursing funds to those districts, and districts as a whole have reported processing more tires than the Department of Finance and Administration has reported being sold each year since 2013.
Some waste tire district officials have argued that the law allowed the funds to get disbursed more expediently rather than having to wait for the funds while it worked with the department on any questions.
Fite and Grappe also found in their research that districts were largely not adequately compensated for the number of tires they reported processing.
"The tire program needs to be revamped altogether," Fite said.
Tire districts are not audited by the state, although solid waste districts are.
Fite said tracking tires through a manifest system must be done uniformly across the state and must include used tires that are sold instead of just new tires.
"We need to get a grip on the used tire business so we can track our tires," he said.
Department of Environmental Quality Director Becky Keogh said her agency was focused on improving the accountability of waste tire districts and wanted to improve tracking tires and accounting for used tires as a part of that.
She said she wants to make sure tire dealers are incentivized to manage tires rather than have them dumped illegally.
Keogh said Fite discussed his findings with her but that she hadn't had a chance to review his findings on the funding formula and whether it benefited tire districts that were a part of planning districts.
The department should first study whether funds are being spent wisely before rethinking how districts are funded, she said, although the department is interested in finding a way to keep the districts from being "fiscally distressed."
"There seems to be a difference of opinion on whether adequate fees are collected," she said. "I think that's something that needs to be talked about."
The financial distress of the districts is accompanied by disappointing recycling practices for tires, Fite said.
Fite said he would like to see the number of waste tire districts in the state shrink and that he would like to see them recycling more tires instead of shredding tires and placing them in underground monofills for a lower price, which some districts do. According to the department reports on the disposition of tire, about a third or more tires processed fall into the "land disposal" category each year.
"I just don't think we should be burying tires in the ground," he said. "I think they're going to be a future cleanup for our children and grandchildren."
Metro on 11/21/2016