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The Baxter Day Service Center lost roughly $75,000 last year on its recycling operations, Executive Director Paul Neal told the Mountain Home City Council on Thursday, painting a picture of a nonprofit still fighting to stabilize after years of financial turbulence but finally seeing a few things break its way.
Neal’s presentation was the first in a series of quarterly updates the council requested when it approved funding for the center in this year’s city budget. The center, which has provided employment and developmental services for adults with disabilities since 1971, also operates the only recycling facility in the Twin Lakes area from its Rossi Road location.
“Thank you so much for your generous appropriation,” Neal told council members at the close of his roughly 40-minute presentation. “It’s much needed.”
The numbers Neal laid out showed a recycling operation still under pressure on nearly every front. Overall volume fell about 7 percent in 2025 compared to the prior year, with cardboard, the center’s largest commodity, dropping about 5 percent and other materials declining nearly 14 percent. Revenue fell even harder, down about 19 percent, with the gap between volume and revenue driven almost entirely by collapsing commodity prices.
“Prices continue to go down,” Neal said. “It’s not pretty right now.”
The center lost close to $50,000 the year before that. The losses have piled up over time. Neal told the council last fall that the center had recorded $460,000 in losses over a five-year stretch, burning through its cash reserves and forcing the nonprofit to take on $150,000 in SBA loans and draw $75,000 on a $125,000 line of credit.
A series of blows
Much of the volume decline traces back to the center’s decision to end curbside recycling collection in July 2025, a move that drew sharp criticism from some council members at the time. Curbside pickup had accounted for roughly 25 percent of the center’s business, but Neal said contamination problems, including everything from cat litter to diapers to syringes, had made the loads unmanageable for his workforce.
The center has clawed back some of that lost volume through its drop-off program, but remains about 10 percent below where it was before curbside collection ended.
Then came the cardboard charges. The center began billing its commercial customers $40 to $200 per month for cardboard pickup last October, a decision Neal has said the organization “hated to do” but could not avoid. The fees brought in needed revenue, but they also cost the center customers. Neal told the council Thursday that about 20 percent of commercial accounts dropped the service after the charges began, though he said the number may settle closer to 15 percent.
“Most of those were the small users,” Neal said. “I guess they could just cram it in the trash, unfortunately.”
Council member Jennifer Baker expressed hope that those customers would bring their recyclables to the center themselves, and Neal said they had seen some of that.
Breakeven in sight
For all the difficult numbers, Neal offered the council something it had not heard from the center in some time: a realistic path to breakeven.
Between the city’s appropriation, which Neal estimated would net the center roughly $50,000, and the cardboard charges, which he projected would bring in $60,000 to $65,000 against about $10,000 to $15,000 in associated losses, the center could come close to covering its operating costs for the first time in years.
“Hopefully, that’ll get us back close to even,” Neal said.
Client enrollment is trending in the right direction, too. The center averaged just under 40 clients per month in 2025, up from lower figures in prior years, and the numbers have continued climbing in recent months. Those clients generate Medicaid revenue, the center’s single largest income source, though Neal noted that reimbursement rates have not increased in more than a decade.
The center raised about $28,000 in donations and in-kind contributions last year through direct mail campaigns and outreach to businesses and commercial customers. An endowment fund the organization started about two and a half years ago has grown to $55,000 from nothing.
Neal said the center is also looking for additional contract work. It currently handles jobs for Baxter Labs on both the Baxter and Vantage sides of the business, with employees picking up materials two days a week. Some of the work is well suited to clients with physical disabilities who cannot do the hands-on sorting that recycling requires. Neal said the center has looked at a few smaller jobs to generate more income, though finding work that fits its workforce is a challenge.
“It has to be something that’s viable for us and for the employer, too,” Neal said.
A market beyond their control
Neal told council members he has spoken with a couple of grant writers in recent months, but the responses have not been encouraging.
“I’ve got one guy looking around for us,” Neal said. “Another guy basically told me that, and I’ve been told this before, we need to get back to being a viable business before we’re going to have much luck with grants.”
Council member Nick Reed asked about the grant efforts, and City Manager Jake Kirby said he appreciated that Neal was working with the city’s grant-writing resources and appeared to have “some solutions on the horizon.”
The broader recycling market remains brutal. The plastic market has essentially collapsed, Neal said, generating almost no revenue for the center right now. PET bottles, which make up about 80 percent of the center’s plastic volume, are effectively worthless at current prices, driven down by low oil prices and the closure of overseas markets, including China, that had long absorbed American recyclables.
Glass and electronics bring in nothing either. When council member Jim Bodenhammer asked about glass revenue, Neal said the center handles those materials at cost simply to serve as a comprehensive recycler for the community, but warned that even that could be at risk if the economics get any worse.
“While we don’t get any revenue, it can’t cost us anything,” Neal said, recalling a period when the center stopped accepting glass because shipping costs exceeded what it was being paid.
Baker acknowledged the bind the center finds itself in.
“I think a lot of us want to know what you’re trying to do to help yourself,” Baker said. “And I know there’s limited options. You can’t make somebody raise the price of plastic or raise the price of cardboard. I mean, you don’t have any control over that.”
“That’s a big problem with this,” Neal said. “We don’t have any control over our revenue, our prices. And same thing with the Medicaid rates for the clients. We can’t change that either.”
Looking ahead
Baker suggested the center print a flyer for inclusion with city water bills, reminding residents what materials the center does and does not accept. She noted that confusion over plastic types, particularly the difference between No. 1 and No. 2 plastics that the center accepts and No. 5 plastics that it does not, leads to contamination that costs the center time and money.
“I think that would help your sorters a lot,” Baker said.
Neal agreed it was a good idea and said the center needed to do that again, noting it had put out similar information in the past.
Council member Bob Van Haaren asked whether the center had looked into extracting gold and rare metals from the computer components and electronics it collects. Neal said someone had recently expressed interest in paying for those items, but the situation is complicated. The center’s current electronics vendor takes everything, including worthless televisions. Switching to a buyer who only wants the valuable components could leave the center stuck with the rest.
“It’s tricky,” Neal said. “You’ve got somebody else willing to pay, but does he really want to take everything? He says he does, but what happens if he all of a sudden says he doesn’t, and we’ve already went away from the other guy?”
The Baxter Day Service Center, founded in 1971, has served more than 2,000 clients over its history and operates from a six-acre campus that includes a 33,000-square-foot warehouse. In addition to recycling, the center provides vocational training and employment for adults with developmental disabilities, work that its supporters say gives the operation a value that transcends its balance sheet.
Baxter County provides $52,000 annually to the center, an amount County Judge Kevin Litty increased from $36,000 during his first year in office. The city’s appropriation, the amount of which the council approved during budget deliberations last fall, represents the first direct municipal funding the center has received in its history.
The center continues to accept drop-off recyclable materials from the public at 1306 Rossi Road. Residents can call (870) 425-4322 for information about accepted materials.
Neal’s next quarterly update has not yet been scheduled.
