Title
Agreement with Allied Waste Transportation, Inc. dba Republic Services of Phoenix to Accept and Process Recyclable Materials (Ordinance S-51496) - Districts 2 & 7
Description
Request to authorize the City Manager, or his designee, to enter into an agreement with Allied Waste Transportation, Inc. dba Republic Services of Phoenix (Republic Services) to accept and process recyclable materials collected by Republic Services and delivered to the City of Phoenix's Material Recovery Facilities (MRFs). 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
Republic Services has requested to enter into an agreement with the City of Phoenix to accept and process its recyclable material. The City of Phoenix can accept these 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 Republic Services for recycling tonnage processed at the City MRFs, which is designed to ensure all costs associated with processing recyclables are recovered by the fee. The terms of this Agreement include:
- In a market with low recycling commodity prices, the City of Phoenix will charge a processing fee to Republic Services, and no revenue share to Republic Services will be available.
- In a market with high recycling commodity prices, Republic Services 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, Republic Services will deliver up to 10,000 tons of recyclable materials to City of Phoenix facilities.
Contract Term
The one-year term of this agreement will begin on or about December 4, 2024, and conclude on or about December 3, 2025. Provisions of the agreement include four, one-year options to extend the agreement.
Financial Impact
Republic Services will be paying Phoenix to accept recyclables to cover all expenses associated with proper handling of the materials. If recycle market prices increase during the term of the agreement, Phoenix and Republic Services would share the additional revenue at a 50/50 split.
Funding for the revenue share payments to Republic Services are available in the Public Works Department's budget.
Location
North Gateway Material Recovery Facility, 30205 N. Black Canyon Highway
27th Avenue Material Recovery Facility, 3060 S. 27th Avenue
Council Districts: 2 and 7
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Public Works Department.