Title
Authorization to Enter into an Agreement to Accept and Process Recyclable Materials and Additional Waste Streams from Allied Waste Transportation, Inc. (Ordinance S-46503)
Description
Request to authorize the City Manager, or his designee, to enter into an Agreement with Allied Waste Transportation, Inc., doing business as Republic Services of Phoenix, to accept and process recyclable, green organics and food scrap materials collected by Allied Waste Transportation, Inc. and delivered to the City of Phoenix's North Gateway and 27th Avenue Material Recovery Facilities (MRF). Further request authorization for the City Treasurer to accept, and for the City Controller to disburse, all funds related to this item.
Report
Summary
Allied Waste Transportation, Inc. has requested to enter into an Agreement with the City of Phoenix to accept and process recyclable, green organics and food scrap materials. The City of Phoenix can accept recyclable materials with terms to address changing market conditions resulting in lower commodity prices and increased processing costs from contamination in the recyclables. This Agreement will authorize the City of Phoenix to charge a processing fee to Allied Waste Transportation, Inc. for recycling tonnage processed at the two City MRFs, which is designed to ensure all costs associated with processing recyclables are recovered by the fee. In addition, for green organics and food scraps, the City of Phoenix will assess Allied Waste Transportation, Inc. with the current processing rate. The terms of this Agreement include:
- In a market with low recycling commodity prices, the City of Phoenix will charge a processing fee to Allied Waste Transportation, Inc., and no revenue share to Allied Waste Transportation, Inc. will be available.
- If recycling commodity prices drop below an amount determined by the City of Phoenix, Allied Waste Transportation, Inc. will be assessed a higher processing fee for all materials processed in a month.
- In a market with high recycling commodity prices, Allied Waste Transportation, Inc. will pay a processing fee and will receive 50 percent of the net revenue share and the City of Phoenix will receive the remaining 50 percent.
Annually, Allied Waste Transportation, Inc. will deliver up to 15,840 tons of recyclable materials with the option to increase with City approval.
Contract Term
The one-year term of this Agreement will be retroactive beginning Jan. 1, 2020 and conclude Dec. 31, 2020. Provisions of the Agreement include four, one-year options to extend the agreement.
Financial Impact
Allied Waste Transportation, Inc. will be paying Phoenix to accept recyclables, green organics and food scraps and to cover all expenses associated with the proper handling of the materials. If recycle market prices increase during the term of the agreement, Phoenix and Allied Waste Transportation, Inc. would share the additional revenue at a 50/50 split. Funds for the revenue share payments to Allied Waste Transportation, Inc. are available in the Public Works Department's budget.
Location
North Gateway Material Recovery Facility, 30205 N. Black Canyon Hwy.
27th Avenue Material Recovery Facility, 3060 S. 27th Ave.
Council Districts: 2 and 7
Department
Responsible Department
This item is submitted by Deputy City Manager Karen Peters and the Public Works Department.