OK, if you want to call a $1 fine 'force', go ahead. You will note that this is similar to the fines they have already been assessing for 3 years for putting recyclables in the trash, and in all that time have only had $2000 worth of fines.
As for why, it is pretty obvious. It is not that they 'want to make compost', it is that they DON'T want recyclable material in the landfills. Once something is in a landfill it is there, taking up space, pretty much forever. Landfills get full and must be closed, and new landfills built. Both of those are expensive (and environmentally unfriendly).
If they compost, on the other hand, they wind up with something useful, which can be sold to help pay for the landfills. Composted material does not become your problem forever, landfilled material does.
I doubt very much that they care what you do with your recyclables, as long as they don't wind up in the landfill.