Title
Intergovernmental Agreement with the City of Tempe to Accept and Process Green Organics, Recyclable Material, and Municipal Solid Waste (Ordinance S-51792) - District 7
Description
Request to authorize the City Manager, or his designee, to enter into an Intergovernmental Agreement (IGA) with the City of Tempe to accept and process green organics, recyclable materials, and municipal solid waste collected in the City of Tempe and delivered to the City of Phoenix’s facilities for processing. Additionally, request the City Council to grant an exception pursuant to Phoenix City Code section 42-20(B) to authorize inclusion of mutual indemnification language that otherwise would be prohibited by Phoenix City Code section 42-18(A) and (B). Further request to authorize the City Treasurer to accept, and for the City Controller to disburse, all funds related to this item.
Report
Summary
The City of Tempe has requested to enter into an IGA with the City of Phoenix to accept and process its green organics and recyclable material on an as needed basis. This IGA will authorize Phoenix to charge its gate fees to the City of Tempe for the green organic tonnage it delivers to Phoenix’s Compost Facility. Annually, the City of Tempe can deliver up to 3,000 tons of green organics to the Phoenix Compost Facility.
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 IGA will authorize Phoenix to charge a processing fee to the City of Tempe for recycling tonnage processed at Phoenix’s Materials Recovery Facility (MRF), which is designed to ensure all costs associated with processing recyclables are recovered by the fee. The terms of this IGA include:
- In a market with low recycling commodity prices, Phoenix will charge a processing fee to the City of Tempe, and no revenue share to the City of Tempe will be available.
- In a market with high recycling commodity prices, the City of Tempe will pay a processing fee and will receive 50 percent of the net revenue share and Phoenix will receive the remaining 50 percent.
Annually, the City of Tempe can deliver up to 12,000 tons of recyclable materials to Phoenix’s MRF.
The Agreement also authorizes the City of Tempe to deliver municipal solid waste to Phoenix’s 27th Avenue Transfer Station for processing.
Contract Term
The one-year term of this IGA will begin on or about July 1, 2025 and conclude on or about June 30, 2026. Provisions of the IGA include four, one-year options to extend the agreement.
Financial Impact
The City of Tempe will be paying the City of Phoenix to accept green organics, recyclables, and municipal solid waste to offset the expenses associated with proper handling of the materials. If recycling market prices increase during the term of the agreement, Phoenix and the City of Tempe would share the additional revenue at a 50/50 split. Funds for the revenue share payments to the City of Tempe are available in the Public Works Department's budget.
Location
27th Avenue Materials Recovery Facility, Compost Facility, and Transfer Station: 3060 S. 27th Avenue
Council District: 7
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Public Works Department.