For years, Ed and Dale Hubbard used worms to turn organic waste into “black gold.”

Their vermicomposting firm, Nature’s Little Recyclers, had three locations churning out rich, coveted compost they could sell. Their clients included the Peggy Notebaert Nature Museum, as well as Chicago Public Schools and the Chicago Park District.

But then the city shut them down, saying there had been complaints about odors and rats.

The Hubbards say the problem is the city’s own confusing policies. It wants to encourage green industry, but the written guidelines haven’t quite caught up, they say.

“The mayor and everyone else is pushing for all these green initiatives,” Dale Hubbard said. “But there aren’t any regulations in place to accomplish these goals.”

Ed Hubbard, Dale’s father, thinks its a matter of “one hand of the city doesn’t know what the other hand is doing.”

Until recently, the city seemed fine with Nature’s Little Recyclers, in business since 2014. Besides selling compost to CPS and the park district, the firm also collected food waste — a crucial raw material — from major city events, like the Bank of America Chicago Marathon.

The firm also was featured on the website of Sustain Chicago, a city initiative focused on green industry and fighting climate change.

Then last summer, the city hit the business with a cease-and-desist letter for two of their three sites. Within days, the city bulldozed over $100,000 worth of compost, worms and materials, they say.

The Department of Public Health is “committed to holding bad actors accountable,” and after several complaints, inspectors observed a “condition that provided rat harborage” and bad odors, spokesperson Anel Ruiz said in a statement.

Ed Hubbard disputes that; he said tarps kept out the rats, and using worms actually reduces odors.

In February, a third letter arrived, ordering them to close their last location, 6902 S. Anthony Ave. Now, they worry city workers could show up at that site, without notice, and ruin an estimated $250,000 worth of compost and worms — some of which was to go to the park district.

“We always thought we had a good working relationship with the city,” Dale Hubbard said. “We met with the Department of Public Health many times [in the past], and they’ve always been really positive and then very quickly it went against us.”

Their goal for all three locations, which had been vacant lots, was to vermicompost for a couple of years until the soil was rich enough to turn the sites into urban gardens, where the community could grow fresh food.

Ruiz said the health department “is supportive and encouraging of composting when done the right way,” but that “none of these operations met the criteria for garden composting or an on-site organic waste composting operation; therefore, they would require a Class III Recycling Facility Permit.”

But Ed Hubbard said that permit doesn’t apply to their firm. Class III recycling facilities can operate only in industrial zones, not the vacant lots the Hubbards used.

Besides, he added, those industrial zones often are too contaminated to use.

Amy Hermalik, associate director of the Institute for Justice Clinic on Entrepreneurship, said it’s time for the city to update the legal codes around composting. The organization she works with provides free legal assistance to small businesses, many of whom feel the burden of outdated regulations.

“They are basically told [by the city] ‘wink-wink, you can operate,’ but they are operating illegally and can be shut down at any moment for any reason,” Hermalik said. “The city was very aware of their existence, they did nothing for years, and now they’re suddenly facing enforcement actions.”

Nature’s Little Recyclers ceased operations, but because their composting material remains on the premises, the city could argue they haven’t actually shut down, Hermalik said.

“Even though we already filed for a court date they just sent us 16 more fines on this lot,” Dale Hubbard said, referring to their final location. “At this point, we just want to settle out with the city, but these fines just keep coming.”

Manny Ramos is a corps member in Report for America, a not-for-profit journalism program that aims to bolster Sun-Times coverage of issues affecting Chicago’s South and West sides.