WORKSHOP ITEM - Joe Huss, Finance Director
Title
REQUEST TO REOPEN GARBAGE, RECYCLING CONTRACT FOR CHANGES TO RECYCLING PROGRAM
Background
At the October 11, 2018 Workshop, representatives from Walters Recycling and Refuse updated the City Council on a number of issues that are occurring in the solid waste and recycling field, including the collapse of recycling markets for material collected and processed in the US. These changes in the recyclables markets have forced Walters to pay a substantial commodity charge to offload collected recyclable materials.
As provided in Section 4.6 of the Walter’s contract, in the event of a substantial market change in any of the Recyclable Material commodity prices either party (the City or Walters) may request to reopen negotiations for the amount per month charged for Recycling Collection services. Walter’s is making that request at this time.
Under the current contract, the Contractor (Walters) is responsible for the marketing of all recyclable materials collected and retains all sales proceeds from marketing recyclables. With changes in the recycling markets causing Walters to now pay a net fee for the disposal of recycling material, Walters is proposing a change wherein Recycling Collection would work in substantially the same manner as is Garbage and Refuse disposal with the City paying the cost to market or dispose of recyclables. Per the proposed change, the Contractor shall pay to the City all of the proceeds it receives from the applicable recycling facility, if any, arising from the Recyclable Materials it delivers to such facility pursuant to the terms of this Agreement (“Recycling Proceeds”) and to the extent such Recycling Proceeds are less than disposal fees arising from the disposal of the Recyclable Materials, the City shall pay Contractor the net disposal fees relative to the same.
Currently, the fee being charged to Walters is about $32 per ton. Per the proposed amendment this fee would be passed through to the City, resulting in an estimated annual cost of $160,000. This fee has been incorporated into the 2019 Sanitation Fund Budget.
Copies of the contract with proposed amendments are attached.
Recommendation
Staff is seeking Council direction on the next steps including bringing forward an amended contract for consideration at the December 20 Council Meeting.