These dual burdens cost the city’s recycling facility an estimated $14.4 million last year — a financial hit that threatens both the municipal government’s revenue-sharing agreement with the Brooklyn-based processor and the overall success of the long-standing curbside pickup program.

Those factors have had an untold impact on the city’s paltry recycling rate of 18 percent, a figure that would nearly double if all metal, glass, plastic and cardboard were separated from the waste stream.

“We’re in a very, very difficult place so things that you might have been able to tolerate just become harder to absorb,” Tom Outerbridge, who manages the Sims Municipal Recycling facility that serves as the city’s contractor, said in a recent interview.

A 2017 report authored by the city’s Independent Budget Office blamed a drop in recycling on “high commodity prices encouraging scavenging and increased aluminum can redemption.” Once those materials are snatched from outdoor bags and bins, they are not counted in the city’s recycling totals, even though they end up being sold back to beverage companies for reuse.

Complicating the matter is the environmental upside to the policy, enabled by a 1983 state law that offers a five-cent deposit for every bottle dropped into machines outside supermarkets and pharmacies.

Proponents of the law say it has driven a reduction in litter and an increase in recycling, even if that boost isn’t accounted for in official city figures. The law incentivized the recycling of 246,000 tons of beverage containers in 2016, according to the most recent data available from the state Department of Environmental Conservation.

The “bottle bill,” as it’s known, has given rise to a new market: Between 4,000 and 8,000 people, often homeless or destitute, collect beverage containers off city streets to pay for their basic needs.

Judith Enck, the former Region 2 administrator for the federal Environmental Protection Agency, said the bill has been “very effective at reducing litter.”

“Most streets you walk in in New York City you don’t see beer and soda and water bottles on the street because people pick [them] up for a nickel, believe it or not,” Enck, who lobbied for the bill’s initial passage in Albany, said in an interview.

But city officials warn it endangers the viability of their recycling program.

Sanitation Commissioner Kathryn Garcia testified at a legislative hearing last year that while she agrees the bill has been “a catalyst for recycling in the state,” a proposed expansion to cover even more materials would hurt the city’s 20-year contract with Sims.

The expansion — which was omitted from Gov. Andrew Cuomo’s State of the State speech this week and appears to be sidelined for the time being — would have applied the five-cent deposit to juice, tea and Gatorade bottles upon redemption.

Ron Gonen, who served as a deputy sanitation commissioner in the Bloomberg administration, said in an interview that the law “completely skews” the city’s recycling rate and robs the city of revenue because the most valuable items are taken.

“We’re obligated under contract to Sims to bring them that material and if they’re not getting that material and it’s being stolen, they’re not going to be able to operate their recycling facility,” Gonen said. “They end up going bankrupt [and] now we have no recycling program for anything else.”

The city pays Sims about $75 for every ton of metal, glass and plastic the facility receives each day from city sanitation trucks. When the market value of those items rises, the contract entitles the city to a rebate, said Hazel Crampton-Hays, a spokesperson for Comptroller Scott Stringer. Sims made nearly $25 million last year from the arrangement.

Discarded paper products provide revenue for the city — a minimum of $14 per ton last year, which amounted to more than $3 million from Sims, she said. Newspapers, which are handled by both Sims and a paper mill on Staten Island, accounted for another $1.7 million in revenue in a municipal budget that is nearing $95 billion.

In a report last year assessing public services, the city noted that revenue from paper had dropped by $4 per ton, “due in large part to China’s ban on mixed paper imports and restrictions on imports of other scrap materials.”

Outerbridge said the de Blasio administration did not benefit from the revenue-sharing agreement last year “because markets are not strong enough and the per-ton composite value is below the threshold for revenue sharing.”

The economic stability of his recycling facility is also endangered by weak market conditions for paper, which was profitable until China’s restriction.

That has made it nearly impossible for Sims to sell the contaminated, “soggy” paper residents mistakenly put in their blue bins that domestic paper mills used to accept when prices were higher. Now most of that material is hauled to landfills, Outerbridge said.

A small business owner in Brooklyn said her private trash carter admitted to sending cardboard to a dump because of China’s ban. POLITICO also observed private waste haulers mixing cardboard with trash, consigning them to a landfill or incinerator.

“As a business owner, I would prefer to recycle, but if it’s all going to a dump I would rather not get charged twice,” said the business owner, who requested anonymity.

For the past 10 years or so, canners have crisscrossed city streets from sunset to sunrise, scavenging through waste bins and recycling bags searching for beverage containers. They laboriously clean and separate the plastic bottles from the aluminum cans, taking them to grocery stores or redemption centers that will pay for their day’s haul.

On a rainy October evening, a homeless man named Stone methodically plucked dozens of White Claw cans and Poland Spring bottles from recycling bags placed outside expensive apartment buildings on the Upper West Side of Manhattan.

He neatly stacked them in his small gray shopping cart, and when he was finished he headed to a nearby grocery to exchange them for five cents a piece. His haul will subsidize the next day’s meal: an egg and bacon sandwich and cheeseburger deluxe from a nearby deli.

“This is hard work. But it’s fun. Nobody’s your boss, nobody could tell you hey, hey, hey — move this, do this, do that, do that, come here,” he said. “You pick up your cans and you mind your business and you go home and you make your money.”

But he conceded it’s a tough life.

“You don’t have a choice — you’re homeless,” he said. “Instead of trying to rob somebody or depend on somebody to give you $2 [for] a cup of coffee … or ask somebody for a cigarette, you’re better off picking up these cans.”

Stone fishes for bottles and cans on the same blocks every weeknight between 80th and 85th streets, near Columbus Avenue. He’s such a regular that one of the building supers hands him bags of recyclables.

He’s even created his own post-work cleaning ritual.

“I take a Q-tip with alcohol – you clean out your ears, you wipe out your nose and then you rush water up in your nose and wash it out,” he said. “Next thing, you see a little bug fly out.”

It’s politically challenging for city officials to crack down on people who are so economically insecure, they sort through garbage for a day’s pay.

“There is literally a nun in Brooklyn who runs a program and the people bring their bottles to them,” Outerbridge said. “She’s doing God’s work.”

“If you go up [against] the bottle bill,” he added, “you find yourself attacking the nun.”

Ana Martinez de Luco, the nun who manages the Williamsburg redemption center Sure We Can, said the facility got 11 million bottles and cans in 2018. She said the center, which is adorned with murals painted by local artists, also serves as a community center for local canners.

She has pushed back on the city’s assertion that canning is harmful for its bottom line.

“In our case, the consumer pays the five cents, the distributor pays the 3.5 cents, the city pays nothing,” she said in an interview. “So why is it that the city is losing money because of us?”

Sure We Can is a nonprofit, but for most redemption centers, canning is big business.

Galvanize Group, in Mount Vernon, made $15 million in 2015 by processing cans and bottles, its founder and president Conrad Cutler said. He dispatches trucks around the city every week to buy the goods from canners like Stone and sell them back to beverage companies for a handsome profit.

Outerbridge sounded a note of optimism about recycling, despite persistently low rates owed to a stalled food waste collection system, inadequate infrastructure in public housing complexes and a lack of financial incentives to separate waste.

“Participation has never been higher and public support and engagement has never been greater,” he said. “Public enthusiasm I would say is at an all-time high. And certainly political support is at an all-time high.”

He blamed recycling troubles on nothing more than “a particularly bad, protracted commodity value slump.”