Title
Intergovernmental Agreement with City of Avondale for Processing Recyclable Materials (Ordinance S-52865) - District 7
Description
Request to authorize the City Manager, or the City Manager's designee, to enter into an Intergovernmental Agreement (IGA) with the City of Avondale to accept and process recyclable materials collected in the City of Avondale and delivered to the City of Phoenix's Material Recovery Facilities (MRF).
Further request authorization for the City Council to grant an exception pursuant to Phoenix City Code Section 42-20(B) to allow for mutual indemnification provisions that are otherwise prohibited by Phoenix City Code Section 42-18(A) and (B).
Additionally, request authorization for the City Treasurer to accept, and the City Controller to disburse, all funds related to this item.
Report
Summary
The City of Avondale has requested to enter into an Intergovernmental Agreement with the City of Phoenix for the processing of recyclable materials at the City's Material Recovery Facilities.
The City of Phoenix is able to provide this service under terms that account for fluctuating recycling market conditions, including lower commodity values and increased processing costs associated with contamination. This agreement ensures that all costs related to the processing of recyclable materials are recovered through a processing fee structure.
The proposed IGA includes the following key terms:
- In periods of low recycling commodity prices, the City of Phoenix will charge a processing fee to the City of Avondale, and no revenue sharing will occur.
- In periods of high recycling commodity prices, the City of Avondale will continue to pay a processing fee and will receive 50 percent of net revenue generated, with the City of Phoenix receiving the remaining 50 percent.
Contract Term
The agreement will begin on or about July 1, 2026, for a five-year term, with no options to extend.
Financial Impact
The City of Avondale will pay the City of Phoenix a processing fee to cover all costs associated with handling and processing recyclable materials.
If recycling market conditions improve during the term of the agreement, net revenues will be shared equally between the City of Phoenix and the City of Avondale.
Funds for any revenue-sharing payments to the City of Avondale are available within the Public Works Department's budget.
Location
27th Avenue Material Recovery Facility - 3060 S. 27th Avenue
Council District: 7
Department
Responsible Department
This item is submitted by Deputy City Manager Alan Stephenson and the Public Works Department.